Investors dump more equity in August, slow roll on bonds
Equity and bond mutual funds and exchange-traded funds saw net outflows of $24.3 billion in August. Equity funds lost a total $43.7 billion due to client redemptions, while bonds added $19.3 billion. During the month, U.S. equities within the Russell 3000 index fell 2.25% while non-U.S. stocks within the MSCI ACWI ex-U.S. index fell 3.1%.
For equities, August marked the sixth consecutive month of outflows and the second worst month of outflows since December. More than two-thirds of the total were from U.S. equity funds. Inflows into bond funds, while still a net positive, were lower relative to the rest of the year as interest rates slid to rare lows.
On a cumulative basis, the two asset classes parted ways in early 2018 as investors reduced their equity allocations while new money continued to be allocated to fixed income.