Mutual Funds Post Largest Weekly Outflow For 2012

Interest in mutual funds dipped mid-December to a record low for the year, according to the latest statistics from the Investment Company Institute. For the week ended Dec. 12, investors pulled an estimated $6.57 billion from mutual funds, more than three times the $2.02 billion they withdrew a week earlier and the most they’ve withdrawn in one week this year.

U.S. stock mutual funds were the heaviest hit, losing $7.23 billion in estimated outflows for the week, followed by non-U.S. funds, which lost an estimated $1.25 billion.

Meanwhile, demand for bond funds wilted, drawing a meager $1.79 billion in estimated inflows, down substantially from the $5.22 billion they reeled in a week earlier. Of the $1.79 billion, $1.58 billion went to taxable bond funds with the remaining $211 million going to municipal bond funds.

Hybrid funds, which invest in both stocks and fixed income securities, provided some good news.  The funds posted estimated inflows of $119 million, reversing the damage from the previous week’s $70 million outflow.

The weekly fund flow estimates are derived from data covering more than 95% of industry assets, according to ICI.  The statistics cover long-term mutual funds, those the ICI defines as investing in long-term instruments.