The demise of equity mutual funds is greatly exaggerated if January 2013 is any indication — equity funds accounted for $51 billion of the estimated $90 billion net inflows to stock and bond funds, excluding ETFs. According to Strategic Insight, which used research from ICI and proprietary surveys with distributors and fund managers, the $90 billion in inflows was significantly greater than the last record set in January 2004, which saw $58 billion of net inflows.
These figures suggest that U.S. investors are finally re-entering the stock market through mutual funds. Avi Nachmany, SI’s Director of Research, commented: “… [P]ost-election assurance of political stability and tax rates combined with rising home prices, falling unemployment, and fading memories of 2008 have helped investors overcome, at least for now, a state of investment anxiety.”
With 80% of stock balance funds in retirement accounts — a number that’s likely to increase as funds are generally held longer — and some of the estimated $10 trillion in cash likely to move into bonds (which saw an almost 50% increase over 2012 monthly average bond net inflows), expect to see more attention paid to our industry. Good news?
