Money and Finance
Financial advisers love ETFs, partly because they tend to be more predictable and tax-efficient than mutual funds, partly because the lower fees on ETFs remove some of the pressure that advisers might otherwise feel to cut their own fees. Naturally, financial advisers are counseling their clients to shift from mutual funds to ETFs.
- A Few Good Reasons To Hoard Some Cash Now - By Jason Zweig
The stock market is near record highs. More money came into U.S. stock mutual funds the week of Oct. 23 than during any other week since 2007. Initial public offerings like Twitter are booming. So have you considered keeping more of your assets in cash?...
- U.s. Stocks Look Pricey, But Bargains Beckon Overseas
Stocks are cheap—just not U.S. stocks. After climbing 5.2% in January, the Standard & Poor's 500-stock index is again nearing all-time highs, spurring many small investors to pile into U.S. stock funds. More than $36 billion flowed into U.S....
- In Striking Shift, Small Investors Flee Stock Market
Renewed economic uncertainty is testing Americans’ generation-long love affair with the stock market. Investors withdrew a staggering $33.12 billion from domestic stock market mutual funds in the first seven months of this year, according to the Investment...
- First Eagle Reopens Two Mutual Funds
First Eagle joins Longleaf and Third Avenue in opening previously closed funds recently.-Arnhold and S. Bleichroeder Advisers said on Tuesday it will reopen two of its First Eagle mutual funds that invest in overseas markets.-The $21 billion First Eagle...
- Mutual Fund Vs Diy
The common belief is that you should just park your money in index mutual funds and annually rebalance. While I believe that's probably good for anyone that doesn't want to take the time to select their own investments, if you are so inclined...
Money and Finance
Are Retail Investors ‘Fleeing’ Stocks? – By Jason Zweig
Make no mistake: Individual investors are selling more U.S. stocks than they are buying, as my colleague Jack Hough pointed out this weekend. But it’s wrong to rely on mutual funds as the sole or primary indicator of retail flows into or out of U.S. stocks.
Many of the redemptions seem, instead, to be exchanges – from mutual funds to exchange-traded funds.
Financial advisers love ETFs, partly because they tend to be more predictable and tax-efficient than mutual funds, partly because the lower fees on ETFs remove some of the pressure that advisers might otherwise feel to cut their own fees. Naturally, financial advisers are counseling their clients to shift from mutual funds to ETFs.
So far this year, U.S. stock ETFs have taken in approximately $22.5 billion in net inflows.
When you add those net ETF inflows to the net outflows from U.S. stock mutual funds, the $68 billion in fund-flight cited by most of the commentariat drops to less than $46 billion.
Then consider that “balanced” mutual funds – those hybrid portfolios of stocks and bonds – have attracted more than $20 billion in net inflows so far this year.
According to Morningstar analyst Annette Larson, the average balanced mutual fund (weighted by the size of assets) has 57% of its portfolio in stocks.
That means that the inflows into balanced mutual funds are the equivalent of another $12 billion in equity purchases. That, in turn, would take the effective net outflows from U.S. stocks down to $34 billion.
Mind you, we’re not saying that $34 billion in outflows isn’t real money. But it’s half the number that the experts usually cite as evidence that small investors are fleeing U.S. stocks.
And if you throw in the net inflows that international stock portfolios — mutual funds and ETFs alike — have attracted so far this year, the overall net redemptions from stock funds shrink to just about zero.
Yes, people have been cutting their exposure to U.S. stocks for years. And yes, there are plenty of reasons, old and new, for retail investors to be furious at the stock market.
But, so far at least, retail isn’t abandoning the stock market wholesale.
- A Few Good Reasons To Hoard Some Cash Now - By Jason Zweig
The stock market is near record highs. More money came into U.S. stock mutual funds the week of Oct. 23 than during any other week since 2007. Initial public offerings like Twitter are booming. So have you considered keeping more of your assets in cash?...
- U.s. Stocks Look Pricey, But Bargains Beckon Overseas
Stocks are cheap—just not U.S. stocks. After climbing 5.2% in January, the Standard & Poor's 500-stock index is again nearing all-time highs, spurring many small investors to pile into U.S. stock funds. More than $36 billion flowed into U.S....
- In Striking Shift, Small Investors Flee Stock Market
Renewed economic uncertainty is testing Americans’ generation-long love affair with the stock market. Investors withdrew a staggering $33.12 billion from domestic stock market mutual funds in the first seven months of this year, according to the Investment...
- First Eagle Reopens Two Mutual Funds
First Eagle joins Longleaf and Third Avenue in opening previously closed funds recently.-Arnhold and S. Bleichroeder Advisers said on Tuesday it will reopen two of its First Eagle mutual funds that invest in overseas markets.-The $21 billion First Eagle...
- Mutual Fund Vs Diy
The common belief is that you should just park your money in index mutual funds and annually rebalance. While I believe that's probably good for anyone that doesn't want to take the time to select their own investments, if you are so inclined...