Relentless Equity Outflows Continue: YTD Mutual Funds Redemptions Surpass 2010 Total, Despite Broad Market Squeeze

Tyler Durden's picture

If the purpose of the forced short squeeze between stocks and the EURUSD was supposed to get retail investors back in the rigged casino, it has failed. In the week ended October 19, yet another $3.5 billion in funds was redeemed from domestic equity mutual funds, with all of it and then some once again rotating into fixed income funds, which even despite offering persistently record low yields, continue to be far more attractive to Joe Sixpack than the joke of a centrally planned policy yoyo that has become the US (and global) stock market. And in the meantime, baby boomers who need stable sources of annuities (read: not equities, not even the bubble that is dividend stocks) are not getting any younger. In addition, after this week, the 10th sequential outflow in a row, we have now surpassed $100 billion in outflows from domestic equity funds, and with it the total outflow of all of 2009. With mutual fund cash at all time record lows, or just about 3.4% the smallest tremor in risk assets which forces mutual funds to mark equities to fair value instead of "to short squeeze", will likely set off a liquidation wave unless enough new capital mysteriously appears to fill what will be the equity hole, that will serve as a springboard for even more redemptions and so on in the mutual fund death spiral.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
midgetrannyporn's picture

there is no retail, there is only the bernank.

depression's picture

I miss the old days of "buy and hold" and "dollar cost averaging"

Still works pretty well in the Gold market, but the average retail with an IRA or 401-K cannot access these markets easily (other than paper GLD iou's.)

deez nutz's picture

who needs retail investors with bernanke and sack in da house?

I think I need to buy a gun's picture

everyones account has to go to zero before the event

MillionDollarBonus_'s picture

Thankfully I own US treasuries as hedge against this type of event.  These outflows have no where else to go but safe-haven US treasuries. I just feel sorry for those who aren't part of the game, and haven't yet bought into the treasury bull market.

Pure Evil's picture



Hurray for you!!!

Nothin like going FULL RETARD by trading worthless FRN's for worthless Treasuries.

With this latest post, you've fully morphed into Bernanks offical brown noser and kiss up.

NotApplicable's picture

Please allow me to introduce you to Satire.

Pure Evil's picture



Allow me to introduce you to knuckles sandwich.

If you think that guy is being satirical, then you've climbed Mount Full Retard.

css1971's picture

So which one of you two guys is Laurel, and which Hardy?


mophead's picture

So now we know where the market is going: higher.

GenX Investor's picture

Why put into a 401k when you can pay off debt?  That is the best return on money for most people.  Joe-Sixpack would earn over 17% on repay credit cards, over 7% paying off that car, over 7% paying off that second mortgage...  Don't give it to the 1%'ers on Wall Street, pay it to yourself...

spongeBOB's picture

Unless you don't pay back your debt.

Irish66's picture

Now people are getting it right

tankster's picture

"Mutual fund death spiral" to add to the equity death spiral to add to the treasury death spiral to add to the euro death spiral? Why am I thinking of economists? Maybe your just early (wrong). Junk away.....

LawsofPhysics's picture

Ben will have the capital to fill the hole, click, there, problem solved.

spiral galaxy's picture

Ben's money. Ben's market.  Do as you will.  For the rest of us, just stay the &*%# OUT!

Christoph830's picture

Note to the SEC and Fed:

While you may like the fact that HFT bots can prop up your joke of a "market," the wild daily swings we have seen over the past year are scaring away retail investors permanently. Bots are the problem, not the solution. You can't have it both ways!

NotApplicable's picture

Whatever makes you think the Fed and the SEC want retail investors? Don't you understand that they aren't trying to save the market, but rather engineer it to their liking, replacing it with a well-oiled facade?

The more retail flees, the easier their job becomes, as it removes downward pressure (assuming the facade is functional, of course).

apberusdisvet's picture


PPT to the rescue; the PONZI MUST NOT FAIL;  all the Ukranian hookers and coke dealers would be unemployed (not to mention the owners of all the kiddie porn sites).

mick's picture

Stopped clock - meet my friends ZH and chicken licken.  I know you guys are gonna get along.

Manthong's picture

Most folks probably need the dough just to pay bills, local taxes and fees in the Obama Economy.

depression's picture

Hopefully folks are paying down short term debt.

$100 Oil = $4 gas at the pump doesn't help much either.

Caviar Emptor's picture

Oh don't ya worry: all that cash is just "sittin' on the sidelines!" 

And stocks just keep getting cheaper by the minute whether they go up or down!

They should change the name "Risk Assets" I think, to make it absolutely clear that you can get something for nothing and hard work is for chumps. Booya!!

Unprepared's picture


Cross-HFT trading will make sure the "market" is quantum locked at target prices.

LouisDega's picture

And the man gets a cigar. You just solved the whos on first whats on second I dont know whos on third mystery. The machines rule the market.

bob_dabolina's picture

Sqeeze this

(my balls)

Libertarians for Prosperity's picture



Give me some tweezers and I'll give it a shot. 

Promise me though, if we can't find them, I can squeeze your wife's.


tmosley's picture

Hey, look everyone, it's Red Neck Republicant.

spongeBOB's picture

Who the hell invests in Mutual Funds anyway?  I mean other than people with 401Ks who have no other choice. With all those damn fees you better off manage your portfolio by buying a few index funds ( ETFs).


s2man's picture

I was forunate enough to get a brokerage account in my 401k, so I'm not stuck with those lousy MF's which my company decided are sufficient for my investing needs.

spongeBOB's picture

That why I rolled my 401K into a brokerage IRA after leaving my job. I was lucky enough to have moved everything into a MM fund while I was deciding what to do, just before the 2008 crash .

Sequitur's picture

Fair comment about dividend payers being in a bubble. I love investing in dividend payers, I'm a horrible short-term trader and in the long run, companies like utilities, energy and healthcare will make money. But companies making money and returning some to shareholders -- they sure have gotten expensive, I've never seen boring utility stocks so expensive. If interest rates rise, look out.

And though I may be a "conservative investor" who likes dividends (maybe that makes me a sucker in this bullshit HFT market), it hasn't stopped me from shorting the fuck out of LNKD and CRM with some big put positions. Gonna short Groupon the day that worthless bitch is unleashed on the market too.

Lady Heather...UNCLE's picture

April 2010 introduced a strong sell-off to about July-Aug 2010. Then it rallied strongly up to May 2011. Well we have an identical looking scenario now. From May 2011 we saw a sell off down to 1075 in October. Now a rally...does this go to new 2 year highs?. BTFD...its the only game in town. The old adage goes "buy the rumours and sell the fact". The fact that there are no facts ensures a permanently bid market. A perpetual motion machine has been devised. And those outflows?. Ne thinks they will be reversed aroud S&P 1450 (just in time for the impending next sell-off) Wash, rinse, repeat (in perpetual motion)

Mark123's picture

Could  you please clarify the bullish take-away from this statistic?

Sigma X's picture

The only bullish take is a sarcastic one. It used to work where redemptions required the mutual funds to liquidate positions to maintain cash levels considering said redemptions. Perhaps I need to refresh my math skills, but it still seems like it should work that way lol.. As far as larger, hedge fund/SWF and algo's driving the market, I have to say it does seem to work that way doesn't it?

danger close here's picture

if retail is running away then do tell who these record shorters are responsible for said super short squeeze this site pimped?

topcallingtroll's picture

IT looks like 90 percent of zero hedge was short.

We need a bull bear poll and capital allocation averages for zero hedgies. This site could develop its own economic indicators and stock forecasting data.

Withdrawn Sanction's picture

" tell who these record shorters are responsible for said super short squeeze this site pimped?"

People exiting double and triple inverse index ETFs...?

jcaz's picture

Nah, that CNBC myth died last week, when someone did some actual MATH, and realized that the actual capitalization of the trick ETF's is a minor percentage of the market.....  Funny, you don't hear the talking heads ranting about leveraged ETF's now....

pitz's picture

Since 'retail' rarely makes money on the stock market, the market will probably only go up once these retail folks start piling back in.  This is a very bullish sign for the markets.  Screw retail, buybacks put more cash in than the retail ppl can.

kito's picture

everyone is happy!!!-- welfare and SNAP recipients, pm holders, 401k-ers with stock exposure AND treasury exposure, pension funds, farmers, etc......ITS ONE GIANT FRIGGIN PARTY!!! EVERYTHING IS UP UP UP UP!!!! bernanke/obama has figured out a way to keep everybody happy!!!!

Odin's picture

All of this outflow and yet markets are rallying... Wait, somebody pinch me...

NotApplicable's picture

You expected something different?

topcallingtroll's picture

I found a great income producing annuity product with an inflation adjustment added on as income every few years or so



Withdrawn Sanction's picture


In this interest rate market? No where, without taking an s-load of risk....which is exactly what the Bernank wants. His ZIRP is driving normally conservative investors into increasingly risky gambles. So the question is, where's the risk hiding in EWZ (Brazil)? Good luck with it though.