Weekly Outflows From Domestic Equity Mutual Funds Surge To $13 Billion, Nearly Surpass Post-Flash Crash Record
More very bad news for mutual funds (which as we disclosed last week have an all time record low cash level ergo once the liquidations begin it is game over): as of the week ended August 3, redemptions from domestic equity mutual funds surged to a near all time high $13 billion, matched only by the $13.4 billion on May 26, 2010. The problem however is that back then we had a dramatic snapback. This time, considering that the market has dropped by almost 10% since August 3, we are fairly confident next week we are due to see an all time record outflow from equity funds. To all those who incorrectly assumed that retail sentiment as expressed by redemption is a contrarian sentiment, best of luck rummaging through the gutter for those McDonalds leftovers. And just is scary is that for the second week in a row, there were outflows from every single security tracked by ICI, nothing was spared: not taxable bonds, not foreign stocks, not munis. Retail has had it with this joke of a market and is investing in ZZ and nothing else. Net result: $67 billion in cash outflows from equity mutual funds in 2011 (and $98 billion in 2010): so... does the SEC still not think there is a confidence problem vis-a-vis the churnathon known as the stock market?
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