Investors are bailing out of mutual funds as if it were 2008.
Mutual funds suffered redemptions of $56.2 billion in the week ended December 19, the biggest outflow since the week ended Oct. 15, 2008, according to data released Wednesday by the Investment Company Institute.
Even as investors were dumping mutual funds last week, they added $25.2 billion to exchange-traded funds.
The exit from mutual funds came as stocks have plunged on fears of a slowing global economy and President Donald Trump’s criticism of Federal Reserve Chairman Jerome Powell. The S&P 500 index lost 5.4 percent in the week ended Dec. 19.
Stock mutual funds had net redemptions of $27 billion in the week while bond funds lost $19.6 billion. Funds that buy a mix of stocks and bonds had outflows of $9.6 billion.
Pointing to the flow of money into ETFs, ICI Chief Economist Sean Collins said in a statement that it reinforced the view that “some investors view periods of volatility as a buying opportunity.”
This article was provided by Bloomberg News.