Dow Jones Newswires | More money was pulled from U.S. mutual
funds than added for the first time since March 2009 following fresh
economic worries and a move by investors to cut risk, said Morningstar
The investment research firm said in its monthly fund-flows report
Friday the $13.22 billion that left U.S. mutual funds in May was due to
$14.96 billion of outflows from domestic stock funds and $5.99 billion
leaving international ones.
Most bond funds had positive flows in May because interest in seeking safer investments increased after recent data signalled some uncertainty in the economic recovery. A record amount of money went into emerging-market bond funds in May — $998 million — and inflows have been steady since the middle of last year, suggesting investors’ perception of risk in this group of assets has changed.
Along with investors’ shrinking risk appetite was the diminishing amount of capital in high-yield bond funds. Three out every four such funds tracked by Morningstar had outflows, and the segment’s total of $6.31 billion was the highest since the company first starting keeping track in 1998. However, all bond funds had a net $7.47 billion of inflows.
Meanwhile, exchange-traded funds had $4.77 billion of inflows while money-market funds had $20.62 billion of outflows last month. However, that pales in comparison to the revised $443.65 billion of outflows Morningstar totaled for the first four months of 2010.