Investors Pull More Money Out of Stock Funds

Investors continued to pull their money out of stocks funds over the last week as the bears refused to relinquish their hold on Wall Street.

Investors redeemed $14.21 billion during the week ended Wednesday, net of new sales., according to TrimTabs Investment Research of Santa Rosa, Calif. That was up from $12.25 billion the previous week.

The Dow Jones Industrial Average closed at 12,466.16 Wednesday, down 2.1% from 12,735.31 on Jan. 9.

"What a week," said Vincent Deluard, global equities strategist at TrimTabs. "There were big outflows -- no surprises here."

Funds investing primarily in U.S. stocks saw a net $8.25 billion walk out the door, down slightly from $8.90 billion during the previous week.

Deluard said that from May to January, investors have pulled a net $102 billion from U.S. equity mutual funds.

Funds investing primarily in non-U.S. stocks had net outflows about $6 billion, nearly twice as much as $3.35 billion the previous week.

Stock market losses wre good for bond funds, which took in a net $2.12 billion, up from $1.6 billion the previous week. Hybrid funds, which invest in both stocks and bonds, took in $908 million, up from $680 million the previous week.

Investors added $8.53 billion to exchange-traded funds during the past week, reversing the $7.79 billion they pulled out the previous week.

ETFs that invest in non-U.S. stocks took in $1.14 billion, after seeing $1.09 billion walk out the door the previous week.

Deluard notes that that ETFs attract more institutional investors, who tend to have a longer-term investment horizon, while mutual funds attract retail investors, who can be more skittish.

"From a logical standpoint," he said, "if you see equities going down, you may want to stick it out and buy, not sell, which is something people are doing right now."