Despite the disastrous third quarter in the markets, we're seeing signs of renewed optimism among investors. In September, for instance, for the first time in three months, more money flowed into mutual funds than came out of them. The biggest winner: Taxable bond funds, which took in $3.5 billion for the month.
At the same time, though, reversals in the markets kept total mutual fund investments down. By the end of September, the total amount of assets in U.S. mutual funds was at a yearly low of just $7.4 trillion. ETFs showed a similar pattern: Asset flows into them were positive in September, but they still fell to a yearly low total investment of $956 billion. That was the first time all year they had dropped below $1 trillion.
These are all figures for September, remember. That optimism on the part of fund investors was rewarded; the S&P 500 returned 11.8 percent in October, its strongest month since 2009.
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