Fund Investors Return to Buy in January
Investors came back to funds for the first time since last summer.
Fund investors returned to the markets in a big way in January, according to estimates by Morningstar Market Intelligence. After pulling $40 billion in December, investors sunk $22 billion (net) back into mutual funds in January. The figure excludes ETFs, money markets, and funds of funds. ETFs added an additional $2 billion. (Note: These figures are revised from the initial ones we posted on Feb. 17.)
It could be that a strong December was a signal to get back in or that investors and their advisors bought after doing tax-loss selling in December.
Flows are rarely causes of market performance but are instead laggards, telling you where the market has been. That was true in January as investors followed a strong December by adding money, though equity markets still sold off.
Russel Kinnel does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.