Sector equity funds experienced their first categorical outflows in the past 16 months during the month of May as investors began to get jittery about investments that are generally viewed as tightly focused and slightly riskier than average.
Investors continue to pour money into mixed asset funds as their appetite for risk increases. From April through June, investors put $7.6 billion into target-risk funds, the most since May 2007, according to Lipper figures.
Outflows from money market funds were tamped down a bit in May and June after several months of $100 million-level outflows.
Investors are diversifying their portfolios in order to not get caught with "all their eggs in one basket" and shunning growth stocks, which were hammered with $9.9 billion in outflows in May alone, according to Lipper figures.
U.S. diversified equity funds shed more money than money market funds during May for the first time in 16 months as the markets plummeted amid high volatility.
Investors are putting their faith and dollars into the growth prospects for emerging markets countries, but have begun to turn away from China and Latin America.
Real estate and natural resources funds were the sector inflow leaders, while financial services funds made a strong comeback in March as investors began to put money into sectors that traditionally lead nascent recoveries.
Investor attitudes toward risk are beginning to change as investors poured $1.3 billion into growth target-risk funds in March, the first inflows for that class in several months.
Flows into fixed-income funds dipped over the most recent three-month period ended in February as investors began moving back into the equity market.
While mutual funds continue to draw money from investors, flows have been into fixed-income funds, with U.S. diversified equity funds still intimidating investors.
Investors have begun shifting their money from the perceived safety of small- and mid-cap funds into multi-cap funds, and appear to be moving toward large-cap funds for the first time in nearly a year.
Flows into emerging markets funds exploded in January helped in part by retirement plan contributions.
Investors turned against gold and real estate funds after both sectors experienced several months of strong inflows.
Asset allocation funds have been consistent moneymakers for fund companies, drawing net inflows for eight consecutive months as of the most recent Lipper figures.
The record amount of flows investors have put into bond funds may foreshadow a strong rally for flows into equity funds.
Flows into style equity funds were negative across the spectrum during the last three-month period after a rally in growth funds.
Large-cap funds continued their asset bleeding during the latest three-month period as investors remained concerned over the performance of some of the large banking institutions and the automotive industry.
Global flexible income funds experienced the largest percentage increase in assets of world equity funds over the last three-month period, according to Lipper figures.
Real estate funds continued their run, taking in $646.5 billion in net inflows from July through September, according to Lipper figures.
August marked the first month during the June-August three-month period that all classes of asset-allocation funds had positive net inflows.
Bond funds experienced the highest inflows in at least the past 20 years in August, taking in a total of $42.3 billion between short-term & intermediate and long-term Lipper categories.