BOSTON (AP) – Investors pulled cash out of stock mutual funds for the seventh month in a row, as the European debt crisis continued to drive U.S. market volatility in November.
Investors withdrew a net $16.1 billion from U.S. stock funds last month, extending a string that began in May, industry consultant Strategic Insight said on Monday, Dec. 12.
Stock funds attracted new cash during the first four months of this year, on the heels of strong market gains in late 2010. But the market was dominated this summer and fall by fears that Europe’s debt crisis was getting impossible to contain.
The Standard & Poor’s 500 index slid about 9 percent in mid-November before recovering most of its gain to finish down less than 1 percent.
Through November, investors withdrew a net $65 billion from stock funds. Investing has taken a more conservative turn since the financial crisis of 2008, with money consistently flowing out of stock funds, and bond funds continuing to attract new cash.
Investors withdrew a net $2.6 billion from foreign stock funds in November, as debt troubles in Europe and slowing economic growth in China continued to depress stock prices in many foreign markets. Through November, investors have deposited a net $45 billion into foreign funds.
Investors deposited a net $11.9 billion in bond funds in November. About $9 billion in new cash was added to taxable bond funds, a category that includes corporate bonds. About $2.9 billion was deposited last month into municipal bond funds, which buy the debt of state and local governments. Year-to-date, bond funds have attracted nearly $104 billion in new cash.
A net $42 billion was deposited into money-market funds last month, marking a reversal from the $21 billion in net withdrawals in October. Net withdrawals from money funds total $173 billion year-to-date.
And investors deposited a net $5 billion into exchange-traded funds in November. ETFs continue to grow much faster than mutual funds, with year-to-date net deposits of nearly $94 billion. At that rate, ETFs could end 2011 with more than $100 billion in new cash for the fifth year in row.
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