Mar 26, 2020 - Economy & Business

Last week's record stock and bond fund outflows trounced 2008

Illustration: Lazaro Gamio/Axios

Investors pulled $153 billion out of mutual funds and ETFs for the week ending March 18, the largest outflows ever, data from the Investment Company Institute showed.

The state of play: The outflows were more than eight times higher than the previous week when investors pulled $19 billion from mutual funds and ETFs that included bond, equity, hybrid and commodity funds.

The intrigue: Investors pulled more money out of bond funds than out of stock funds by a magnitude of 10 to one, the data shows.

By the numbers: For mutual funds specifically, bonds saw their largest outflows ever, with investors pulling 1.9% of total January 2020 assets out of funds, ICI senior director of industry and financial analysis Shelly Antoniewicz tells Axios.

  • That was nearly double the previous high in percentage terms seen in October 2008 (1.1%) during the financial crisis.
  • The dollar value ($93 billion) pulled from bond mutual funds last week was more than five times the 2008 total ($18 billion).
  • Including bond ETFs, $114 billion was pulled out of bond funds during the week, according to ICI's data.

Quick take: The outflows from bonds likely reflect the fact that investors have loaded up on bond funds over the past two years. While equity funds saw their largest outflows on record in 2019, despite the S&P 500 gaining 30%, bond funds saw near record inflows.

Go deeper: Don't panic about the stock market

Go deeper

Money market funds see largest inflows in history for second straight week

Data: Investment Company Institute; Chart: Andrew Witherspoon/Axios

Thursday's stock market jubilation came in stark contrast to the general malaise that has gripped investors for much of this month.

Driving the news: Money market funds, which are effectively savings accounts, saw their two largest weeks of inflows in history, as investors flooded into the safety of cash, data from the Investment Company Institute shows.

Dollar rises to record highs as businesses prepare for coronavirus disaster

Data: FactSet; Chart: Andrew Witherspoon/Axios

Panic in financial markets has grown to the point that many now believe the only safe asset is the U.S. dollar.

Driving the news: The value of the dollar index rose to near its highest level in 18 years, as banks, traders and businesses made a rush for cash, fearful they could run out as the economy sinks into recession.

The next dominoes in the coronavirus economy

Illustration: Sarah Grillo/Axios

Coronavirus is already the most serious threat to the U.S. economy since the financial crisis, and the dominoes are aligned for a severe recession that could erase much of the 11-year recovery.

What's happening: While the outbreak itself is unlikely to drive an economic collapse, the U.S. has been something of a ticking time bomb for some time.