By Paul Katzeff, Investors Business Daily, Twitter @IBD_PKatzeff
Investors yanked a whopping net of $36.79 billion out of stock funds in December, according to the Investment Company Institute.
Their flight reflected jitters about the then-upcoming start to Federal Reserve interest rate hikes. It was also in response to worrisome stock market news about the impact of China’s economic slowdown on global GDP growth and even on U.S. economic prospects.
That was the fifth worst monthly stampede out of stock mutual funds since the ICI began to track flows in 1984.
The worst monthly outflow was October 2008’s $70.5 billion. That took place as investorssuffered through the worst monthly decline in the broad market during the financial crisis of 2007-2009.
In fact, three of the four worst outflow months on record were in 2008. The fourth was in 2002.
December’s outflow topped November 2015’s $20.57 billion outflow.
Bond funds had outflow of $27.22 billion in December, far heavier than November’s $5.05 billion.
December’s bond outflow was the fourth worst on record.