BOSTON ( TheStreet) -- U.S. stock mutual funds are forecast to set a new record for investor withdrawals in August as Americans recoil from the biggest equity-market slump in three years and the first-ever downgrade of Treasuries.
The prediction, from analyst Kevin McDevitt at mutual-fund tracker Morningstar, comes after July's $22.9 billion in outflows, the most since the peak of the credit crisis in October 2008, when investors pulled $28 billion from U.S. stock funds. "With August off to a very rocky start, this trend is sure to continue with deeper outflows to come."
Investors have withdrawn a net $200 billion from U.S. stock mutual funds over the past five years. Total fund industry assets peaked at $4 trillion in late 2007, but the subsequent stock-market crash a year later, the prolonged recession and last year's so-called flash crash have contributed to skittish investor behavior that has resulted in outflows of about $500 billion since the peak, according to Morningstar.