The Outflow Question

The stock markets have cooled off considerably from their 2009 runup, but they've been generally positive all year. That makes it all the more puzzling that inflows into U.S. stock funds have dropped down so much.

For the week ended March 31, $4.5 billion flowed into bond funds, and another half a billion was invested into international stock funds. But domestic stock funds actually had outflows of $60 million on the week. Does that seem odd? In a bull-market era, why would people choose this time to exit their equity mutual funds?

The biggest loser, though, has been the money market funds. The seven-day average yield on a money market fund is a paltry 0.02 percent, so it's no wonder that people pulled more than $30 billion out of their money market funds in that single week. But the next question is, if that money isn't going to stock or bond funds, where is it going?