Stockfunds Experience The Biggest Outflow in 5 Years

Stock pundits argue that there is still hope because as much as the bulk of the money is moving away from the active investments, there is still reason to remain upbeat because the funds are being reallocated to passive destinations such as ETFs. Over the same period, the ETFs took up $2.4B out of the $16.9B outflow. It may mean that the Stock exchange – traded funds will soon outperform the hedge fund trades. That’s a good thing even if it means that hedge funds will have less activity and probably a less attractive destination for job-seekers willing to land hedge fund jobs.

Active funds have been experiencing more outflows in recent times. Active funds, mostly involving the stock market and hedge funds have had a growing outflow in the week ended Oct.19, placing increased fears about market volatility and short book underperformance to be expected in the coming financial year. The stock mutual funds in USA to be specific have had the largest outflows in 5 years according to the ICI data, with about $16.9 billion pulled out of the stock mutual funds in just the week headed to Oct.19.