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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 | 4410027 Theta_Burn
Theta_Burn's picture

Hangnail pattern.

Thu, 02/06/2014 - 20:57 | 4410044 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 | 4410061 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 | 4410469 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 | 4410066 NOTaREALmerican
NOTaREALmerican's picture

Only when it fits the narrative.

Thu, 02/06/2014 - 22:21 | 4410336 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 | 4410071 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 | 4410103 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 | 4410213 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 | 4410250 fonzannoon
fonzannoon's picture

don't forget cannon fodder

Thu, 02/06/2014 - 22:34 | 4410380 StychoKiller
StychoKiller's picture

"Once bitten, twice shy!"

Thu, 02/06/2014 - 20:57 | 4410033 Dr. Engali
Dr. Engali's picture

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

Thu, 02/06/2014 - 20:57 | 4410040 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 | 4410052 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 | 4410080 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 | 4410093 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 | 4410101 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 | 4410122 buzzsaw99
buzzsaw99's picture

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

Thu, 02/06/2014 - 21:27 | 4410137 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 | 4410126 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 | 4410035 fonzannoon
fonzannoon's picture

see...they don't need MYRA's. 

Thu, 02/06/2014 - 21:09 | 4410089 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 | 4410037 bubblemania
bubblemania's picture

Bullish!

Thu, 02/06/2014 - 20:57 | 4410039 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 | 4410194 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 | 4410043 MrTouchdown
MrTouchdown's picture

Down with pants!

Thu, 02/06/2014 - 21:00 | 4410054 buzzsaw99
buzzsaw99's picture

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

Thu, 02/06/2014 - 21:02 | 4410056 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 | 4410094 Clycntct
Clycntct's picture

HA Ha good one.

Thu, 02/06/2014 - 21:30 | 4410148 Westcoastliberal
Westcoastliberal's picture

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

Thu, 02/06/2014 - 21:31 | 4410151 Westcoastliberal
Westcoastliberal's picture

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

Thu, 02/06/2014 - 21:31 | 4410153 Westcoastliberal
Westcoastliberal's picture

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

Thu, 02/06/2014 - 21:31 | 4410155 Westcoastliberal
Westcoastliberal's picture

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

Thu, 02/06/2014 - 21:32 | 4410159 Westcoastliberal
Westcoastliberal's picture

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

Thu, 02/06/2014 - 22:22 | 4410342 bearwinkle
bearwinkle's picture

Damn, cat got your tongue?

Thu, 02/06/2014 - 21:03 | 4410059 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 | 4410060 daneskold
daneskold's picture

T

Thu, 02/06/2014 - 21:04 | 4410065 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 | 4410076 youngman
youngman's picture

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

Thu, 02/06/2014 - 21:05 | 4410078 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 | 4411101 cro_maat
cro_maat's picture

Yellen Blossom Special

Thu, 02/06/2014 - 21:07 | 4410083 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 | 4410119 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 | 4410145 pragmatic hobo
pragmatic hobo's picture

those who panic first panic best

Thu, 02/06/2014 - 21:29 | 4410146 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 | 4410147 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 | 4410187 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 | 4410191 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 | 4410201 SillySalesmanQu...
SillySalesmanQuestion's picture

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

Thu, 02/06/2014 - 21:53 | 4410230 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 | 4410318 Wait What
Wait What's picture

tick, tock, tick, tock.

Thu, 02/06/2014 - 21:57 | 4410240 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 | 4410329 Oldwood
Oldwood's picture

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

Fri, 02/07/2014 - 21:40 | 4410317 Wait What
Wait What's picture

Get Long Immediately!!

Thu, 02/06/2014 - 22:32 | 4410372 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 | 4410893 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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