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Retail Panic: Largest Equity/[Bond] Fund Outflow/[Inflow] In History

Tyler Durden's picture





 

Last week it was the largest equity outflow in over two years. This week, following the Monday drubbing which had the temerity to push the S&P to an "unprecedented" 5% from its all time highs, the timid retail investor said enough, and ran for the hills resulting in the largest equity outflow. Ever.

According to Bank of America, aAfter a 5% loss on the S&P 500 over the last two weeks (through February 5) equity funds reported the largest weekly outflow on record. Outflows from equity funds accelerated to $27.95bn this week from a $12.02bn outflow last week, again led by ETFs." Sure enough, what goes out (here), must come in (somewhere over there), which is why at the same time all fixed income funds reported a record $14.09bn inflow. "Mutual fund investors were clearly seeking the safety of bonds, as three quarters ($11.05bn) of the total net bond fund inflow went into government funds and another $3.48bn into high grade." The great unrotation has officially begun, and unless the downward momentum in stocks is halted (think USDSPY upward momentum ignition), the party may be coming to an end.

Full detail from BofA:

After a 5% loss on the S&P 500 over the last two weeks (through February 5) equity funds reported the largest weekly outflow on record, while bond funds had a record inflow. Outflows from equity funds accelerated to $27.95bn this week from a $12.02bn outflow last week, again led by ETFs. At the same time all fixed income funds reported a record $14.09bn inflow. Mutual fund investors were clearly seeking the safety of bonds, as three quarters ($11.05bn) of the total net bond fund inflow went into government funds and another $3.48bn into high grade. Outside of short-term funds inflows into high grade accelerated to $1.80bn. High yield funds, on the other hand, had an outflow of $0.91bn, similar to $1.04bn outflow last week, and EM bond fund outflows also remained elevated at $1.98bn. Loan fund inflows have remained little changed, however, coming in at $0.38bn, while muni funds were close to flat with a $0.07bn net inflow. Finally, money market funds reported a $5.85bn outflow.

 

 

Weekly equity fund flows:

 

 

Weekly fixed income flows:

 

 


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Thu, 02/06/2014 - 20:55 | Link to Comment Theta_Burn
Theta_Burn's picture

Hangnail pattern.

Thu, 02/06/2014 - 20:57 | Link to Comment Rick Blaine
Rick Blaine's picture

Wait...does this mean that there are in fact entities besides the algos/HFTs trading stocks these days?????

Thu, 02/06/2014 - 21:32 | Link to Comment Soul Glow
Soul Glow's picture

Trading?  The only things trading are algos.  Mom and Pop are obviously getting the jitters and some have pulled their funds.  Look for more institutional selling that begets more selling from the dumb money folks.  The dollar has lost steam, so have stocks, and it looks like gold has found a nice support.

Look for gold to stay where it is, but for stocks and the dollar to continue to trade down.

Thu, 02/06/2014 - 23:11 | Link to Comment Wahooo
Wahooo's picture

The algos let me play with them today. We were all over the place, they party, it was fun. But they told me not to come back.

Thu, 02/06/2014 - 21:04 | Link to Comment NOTaREALmerican
NOTaREALmerican's picture

Only when it fits the narrative.

Thu, 02/06/2014 - 22:21 | Link to Comment aVileRat
aVileRat's picture

Narratives should have at least 2 plot twists. But yes, job numbers tomorrow should be pretty weak. How people (and by People I mean bonds) view that as a Taper signal will be in the air.

We can inferr it will be negative, but then again everyone KNOWS the numbers will be loaded with questionable flags and smoothing. So it then becomes what will this mean to the 10y and EM yields. Is there going to be anything in the mix of employment which shows the quality of the underperformance ?

Risk off compounded with the depleted ASEAN hard reserves would be pretty unnerving.

 

Thu, 02/06/2014 - 21:04 | Link to Comment knukles
knukles's picture

Interesting.
Us aside here on the hedge, it's quite telling.
The latest week or two's actions while unpleasant are not the stuff YET of big bad market debacles.
And here we have money roaring back out of stocks into High Grade Fixed Income (credit, especially junk got junked, EM, junked, etc)

That tells us that folks out there, whether Ma & Pa Kettle or Institutions are leery of the ride they've had....
Been good, get out while you can, in practice.

Usually doesn't happen till the market's tanked much more, is bid-less, etc.

Very telling....
Fragile out there....

Thu, 02/06/2014 - 21:14 | Link to Comment fonzannoon
fonzannoon's picture

knuks just as an alternative view...i wonder if the wealthy were getting pissed that a few middle class minions snuck into the party and this is their way of escorting them out.

Thu, 02/06/2014 - 21:52 | Link to Comment knukles
knukles's picture

fonz, I don't think the 1% give a rats ass about the rest of us.
They don't even think about us... except as baggage and noise-some irritants.

Thu, 02/06/2014 - 21:58 | Link to Comment fonzannoon
fonzannoon's picture

don't forget cannon fodder

Thu, 02/06/2014 - 22:34 | Link to Comment StychoKiller
StychoKiller's picture

"Once bitten, twice shy!"

Thu, 02/06/2014 - 20:57 | Link to Comment Dr. Engali
Dr. Engali's picture

Poor retail just got suckered back in for a quick 5% trim.

Thu, 02/06/2014 - 20:57 | Link to Comment NoDebt
NoDebt's picture

I think you're right.  

Man, I've been saying for a long time what a hair-trigger everyone is on right now.  Somebody just took advantage of that, I guess.  Seeing as how it worked so well, I'll be we see it happen a few more times before it loses it's effect.

 

Thu, 02/06/2014 - 21:02 | Link to Comment Dr. Engali
Dr. Engali's picture

That's the way I see it. Everybody and their brother started clamoring for moar stock exposure. Return chasing fools. Now they will get a shave in the bond side.

Thu, 02/06/2014 - 21:05 | Link to Comment Soul Glow
Soul Glow's picture

Bonds are so controlled by funds that I figure we could get see a drop in rates and still see outflows.  Boomers are needing cash and selling the only asets they have - IRAs - other than their houses.

Thu, 02/06/2014 - 21:09 | Link to Comment Dr. Engali
Dr. Engali's picture

That's true, but unless the fed sacrifices the stock market rates aren't going any lower so they will be selling at a loss .....again.... As rates creep up.

Thu, 02/06/2014 - 21:23 | Link to Comment Soul Glow
Soul Glow's picture

SInce you are being hypothetical what if what you say is true and the Fed doesn't sacrifice equities, but rather the dollar?  Rates could stay where they are in that case, I think.

Thu, 02/06/2014 - 21:17 | Link to Comment buzzsaw99
buzzsaw99's picture

there is still the bush 1&2 solution - stealth monetization

Thu, 02/06/2014 - 21:27 | Link to Comment Soul Glow
Soul Glow's picture

When has the Fed's policy not been stealth monetization?  Wilson went right to war to start off the Fed's tenure; FDR confiscated gold in 1933 - the Treasury/Fed haven't looked back since.

Thu, 02/06/2014 - 21:18 | Link to Comment texas sandman
texas sandman's picture

So, now the great rotation
... from BTFATH to BTFD!

Oh yeah...just for effect
..my first. FUCK YELLEN!!

There, feel better now.

Thu, 02/06/2014 - 20:56 | Link to Comment fonzannoon
fonzannoon's picture

see...they don't need MYRA's. 

Thu, 02/06/2014 - 21:09 | Link to Comment knukles
knukles's picture

This economy is So Bad that I'm applying to the Federalies for a YouRAtm.

That's an IRA for me funded by You, the taxpayers.
Why the fuck not, eh?
They're subsidizing everything else.

This whole world is a mess.
Nothing the Fuck Works Anymore

Thu, 02/06/2014 - 20:56 | Link to Comment bubblemania
bubblemania's picture

Bullish!

Thu, 02/06/2014 - 20:57 | Link to Comment Great Unwashed
Great Unwashed's picture

A sure sign the market is going up. Indicators don't get any better than that.

Thu, 02/06/2014 - 21:45 | Link to Comment machineh
machineh's picture

You might be winking as you type that. But it's no joke. Public panic is a potent buy signal.

The Fed's Flying Yellendas are on track for their unwritten target of 'S&P 2K by springtime.'

Thu, 02/06/2014 - 20:56 | Link to Comment MrTouchdown
MrTouchdown's picture

Down with pants!

Thu, 02/06/2014 - 21:00 | Link to Comment buzzsaw99
buzzsaw99's picture

the stock selloff was always a ruse to help fixed income desks

Thu, 02/06/2014 - 21:02 | Link to Comment NOTaREALmerican
NOTaREALmerican's picture

Well, the market is up today, so it looks like "investors" are taking the "long" view and "investing" in fundamentals again.  

Thu, 02/06/2014 - 21:11 | Link to Comment Clycntct
Clycntct's picture

HA Ha good one.

Thu, 02/06/2014 - 21:30 | Link to Comment Westcoastliberal
Westcoastliberal's picture

Can you say "dead cat bounce"? I knew that you could!

Thu, 02/06/2014 - 21:31 | Link to Comment Westcoastliberal
Westcoastliberal's picture

Can you say "dead cat bounce"? I knew that you could!

Thu, 02/06/2014 - 21:31 | Link to Comment Westcoastliberal
Westcoastliberal's picture

Can you say "dead cat bounce"? I knew that you could!

Thu, 02/06/2014 - 21:31 | Link to Comment Westcoastliberal
Westcoastliberal's picture

Can you say "dead cat bounce"? I knew that you could!

Thu, 02/06/2014 - 21:32 | Link to Comment Westcoastliberal
Westcoastliberal's picture

Can you say "dead cat bounce"? I knew that you could!

Thu, 02/06/2014 - 22:22 | Link to Comment bearwinkle
bearwinkle's picture

Damn, cat got your tongue?

Thu, 02/06/2014 - 21:03 | Link to Comment daneskold
daneskold's picture

This market consists of a few shorts trying to push a beachball underwater.  It just won't stay under.

 

Up, up and away no matter what.

Thu, 02/06/2014 - 21:02 | Link to Comment daneskold
daneskold's picture

T

Thu, 02/06/2014 - 21:04 | Link to Comment OC Sure
OC Sure's picture

Of course the numbers are the largest ever. They are nominal. Isn't the reason why everything is priced so high because of the money printing? More money, larger flows?  What are the stats on a percentage basis? 

Thu, 02/06/2014 - 21:06 | Link to Comment youngman
youngman's picture

It shows the fear out there and the hairtrigger.....

Thu, 02/06/2014 - 21:05 | Link to Comment creeko
creeko's picture

Is there a song that can be played on a fiddle which also captures the essence of muppet?

Fri, 02/07/2014 - 09:11 | Link to Comment cro_maat
cro_maat's picture

Yellen Blossom Special

Thu, 02/06/2014 - 21:07 | Link to Comment stant
stant's picture

well how did we arrive at this dark situation. no flight to regular places of safety. what does that mean pray tell

Thu, 02/06/2014 - 21:18 | Link to Comment seek
seek's picture

Is it really a record, that is, bigger than the outflows seen in 2008? Because those were massive, and if it's even larger, this is actually huge news.

Thu, 02/06/2014 - 21:29 | Link to Comment pragmatic hobo
pragmatic hobo's picture

those who panic first panic best

Thu, 02/06/2014 - 21:29 | Link to Comment Westcoastliberal
Westcoastliberal's picture

Fool me once, shame on....?? Fool me again...? Won't get fooled again! (paraphrasing "W")

Thu, 02/06/2014 - 21:30 | Link to Comment DebtSlaveZombie
DebtSlaveZombie's picture

Haha. So dumb. That pretty much guarantees we have hit the low for the year. S&P 2000 by Memorial Day.

Thu, 02/06/2014 - 21:42 | Link to Comment fonzannoon
fonzannoon's picture

makes sense to me. punt retail out on their ass. party time. same as it ever was.

Thu, 02/06/2014 - 21:44 | Link to Comment Goldilocks
Goldilocks's picture

Popular Songs From 1890-1920
http://www.youtube.com/watch?v=uOzO9O15gwI (8:18)

The Sting Theme (Joplin - The Entertainer)
http://www.youtube.com/watch?v=_WxfjWnuEno (3:21)

Thu, 02/06/2014 - 21:47 | Link to Comment SillySalesmanQu...
SillySalesmanQuestion's picture

There are still retail investors out there...? In these markets....? Shocking.

Thu, 02/06/2014 - 21:53 | Link to Comment fijisailor
fijisailor's picture

1929 had several false recoveries before the big one.  With all the added financial "creativity" we can expect many more confusing  and reassuring signals before the final fleecing.

Thu, 02/06/2014 - 22:13 | Link to Comment Wait What
Wait What's picture

tick, tock, tick, tock.

Thu, 02/06/2014 - 21:57 | Link to Comment TheRideNeverEnds
TheRideNeverEnds's picture

Since JPM,  Boa, and Goldman have all recently put out information negative on stocks to scare the children then promply bought the dip with both hands I am thinking that we are going to at least 2000 in the ES by the end of this year.  

 

Always do the opposite of what Goldman says.

Thu, 02/06/2014 - 22:19 | Link to Comment Oldwood
Oldwood's picture

You are suggesting manipulation and we know that can't happen.

Fri, 02/07/2014 - 21:40 | Link to Comment Wait What
Wait What's picture

Get Long Immediately!!

Thu, 02/06/2014 - 22:32 | Link to Comment Bohemond
Bohemond's picture

Help me out here, boys. QE is supposed to benefit this country. So it appears a lot of this printed money is going to the EMs. Where they squander the money on conspicuous consumption, new condos, and uneeded shopping malls.  So, why do "investors" panic when the FED tapers or EMs struggle ?

Fri, 02/07/2014 - 04:17 | Link to Comment Watson
Watson's picture

>>>
Retail Panic: Largest Equity/[Bond] Fund Outflow/[Inflow] In History
<<<

History suggests:

1. If retail thinks bonds are going better, then bonds are going worse; and also

2. If retail thinks, very strongly, that equities are going worse, then equities are going much, much higher.

Watson

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