In the days leading up to the Aug. 2 debt ceiling showdown in Congress, nervous mutual fund investors pulled money from stock and bond funds at an accelerated pace. They withdrew an estimated net of $16.9 billion in the week that ended Aug. 3, the Investment Company Institute said. That's the largest amount withdrawn in one week since March 2009.
For the week, total stock fund outflows rose to $13 billion, significantly higher than the outflow of $9.3 billion for the week ended July 27. It was the largest amount since May of last year. The bulk of the stock total consisted of withdrawals from U.S. funds. Investors pulled a net of $10.4 billion from domestic stock funds.
The four-week moving average for stock funds, a less volatile measure of fund flows, rose to an average outflow of $8.1 billion. The previous week's moving average was $5.9 billion.
Investors withdrew a net of $2.9 billion from bond funds as their anxiety increased. By comparison they were making weekly net deposits of as much $6 billion in early July. Investors cashed out a net $2.2 billion from taxable bond funds, almost 28 times the $79 million withdrawn the week before.
The four-week moving average for bond funds decreased to a net inflow of $1.1 billion from the previous week's average of $3.4 billion.
The total value of all mutual funds as of the end of June was $12.2 trillion, according to the Investment Company Institute.
Estimated mutual fund flows in millions of dollars.
Fund Type 7/27/2011 8/3/2011
Total Equity -$9,324 -$12,984
Domestic -$7,997 -$10,435
Foreign -$1,327 -$2,549
Hybrid -$73 -$1,092
Total Bond -$223 -$2,860
Taxable -$79 -$2,199
Municipal -$144 -$661
TOTAL -$9,620 -$16,936
Hybrid funds are able to invest in stocks and fixed-income investments.
Source: Investment Company Institute