Sep 24, 2020 - Economy
Equity outflows speed up
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One paradox of the recent bull-market run is that it has taken place in the face of consistent selling by investors in ETFs and mutual funds.
The big picture: Monthly flows from actively-managed stock-market funds have been negative for years, and while flows into passively-managed funds have been positive, they have generally been smaller.
Driving the news: Now, even passively-managed mutual funds and ETFs are seeing outflows. Data from the Investment Company Institute show about $17 billion per month leaving passive strategies in the past three months — something that has never happened before.
- One possible explanation: A lot of passively-invested money is in target-date funds that periodically rebalance. The stock market rally could have forced those funds to sell some equities, just to keep their total stock-market allocation at the target percentage.
