To comply with changing international privacy requirements, ICI informs its visitors that we use cookies on our web site. ICI only uses cookies to allow subscribers and members to more easily use our site and to record site utilization. No personal or private information is gathered or stored. More details, including how to disable cookies, can be found on our privacy and cookie policy page. If you disable cookies, you will see this message on future visits to our site. Please click the enable button to consent to accepting cookies.
  • ICI Global
  • Independent Director's Council
Sign In  |  Forgot Password?
Advanced | Tips
  • Home
  • Policy Priorities
    • Fund Regulation
    • Retirement Security
    • Trading & Markets
    • Fund Governance
    • Taxes
    • ICI Comment Letters
  • Research & Statistics
    • Industry Research
    • Investor Research
    • Retirement Research
    • Statistics
  • Government Affairs
    • Financial Services
    • Retirement Security
    • Tax
    • Testimony
  • Industry Operations
    • Fund Accounting, Financial Reporting, and Valuation
    • Fund Distribution, Fund Clearance, and Settlement
    • Operations, Transfer Agent Servicing, and Recordkeeping
    • Portfolio Security Operations
    • Resource Centers
    • Technology, Business Continuity, and Information Security
  • News & Media
    • Media Contacts
    • News Releases
    • Blog: ICI Viewpoints
    • Speeches & Commentaries
    • Opinions & Responses
    • Videos
    • Podcasts
  • Publications & Resources
    • Resource Centers
    • Frequently Asked Questions
    • Fact Books
    • Research Publications
    • White Papers
    • Annual Reports
  • Events
    • ICI Events
    • ICI Global Events
    • IDC Events
    • Past Event Highlights
    • Sponsorship Opportunities
    • Event Contacts
  • About ICI
    • Mission & History
    • Board & Leadership
    • Membership
    • Annual Reports
    • ICI Education Foundation
    • Business Continuity
    • Careers
    • Contact Us

TOPICS

401(k)
Bond Fund
Bonds
COVID-19
Commodity Investments
Corporate Bonds
Cybersecurity
Equity Fund
Equity Investing
Europe
Events
Exchange-Traded Funds
Federal Reserve
Financial Markets
Financial Stability
Fixed Income
Fund Governance
Fund Regulation
GMM
Global
Government Affairs
ICI Global
IDC
IRA
Index Fund
Interest Rate
International
Investment Education
Investor Research
Money Market Funds
Mutual Fund
Operations and Technology
Policy Research
Proxy Voting
Retirement Policy
Retirement Research
Savings
Shareholder
Target Date Funds
Taxes
Trading
Treasury

ARCHIVE

  • 2021
    • January
  • 2020
    • December
    • October
    • September
    • August
    • July
    • June
    • May
    • April
    • March
    • February
    • January
  • 2019
    • December
    • November
    • October
    • September
    • August
    • July
    • June
    • May
    • April
    • February
    • January
  • 2018
    • December
    • November
    • October
    • September
    • August
    • June
    • May
    • March
    • February
    • January
  • 2017
    • December
    • November
    • October
    • September
    • August
    • July
    • June
    • May
    • April
    • March
    • February
    • January
  • 2016
    • December
    • October
    • September
    • August
    • July
    • June
    • May
    • April
    • March
    • February
    • January
  • 2015
    • December
    • November
    • October
    • September
    • August
    • July
    • June
    • May
    • April
    • March
    • February
    • January
  • 2014
    • December
    • October
    • September
    • August
    • July
    • June
    • May
    • April
    • March
    • February
    • January
  • 2013
    • December
    • October
    • September
    • August
    • July
    • June
    • May
    • April
    • March
    • February
    • January
  • 2012
    • December
    • November
    • October
    • September
    • August
    • July
    • June
    • May
    • April
    • March
    • February
    • January
  • 2011
    • December
    • November
    • October
    • September
    • August
    • July
    • June
    • May
    • April
    • March
    • February
    • January
  • 2010
    • December
    • November

Home Viewpoints

Print this page

Why Long-Term Fund Flows Aren’t a Systemic Risk: Multi-Sector Review Shows the Same Result

By Sean Collins

March 4, 2015

Fourth in a series of Viewpoints on long-term funds and systemic risk

In a recent blog post discussing why we believe flows from long-term mutual funds do not pose risk to the financial system, we posted a chart showing that outflows from bond funds are modest even during periods of stress in the financial markets.

Since then, we have been asked whether we could provide similar charts for sub-categories of funds, such as high-yield or investment-grade bond funds.

To accommodate such requests, we have created similar charts for the following eight fund categories: domestic equity, emerging markets equity, investment-grade bond, high-yield bond, government bond, multi-sector bond, world bond, and tax-exempt bond.

Within these finer categories, the broad conclusions that we made in the earlier blog post continue to hold. In each category:

  • outflows from funds tend to be muted, even during periods of financial market turmoil;
  • some funds experience greater than average outflows, but even these are not extreme; and
  • even during periods of stress when funds in aggregate are seeing outflows, some funds typically are seeing inflows.

For more detail, see the charts below.

Modest Outflows from Domestic Equity Funds Even During Times of Market Stress
Net new cash flow as a percentage of assets; monthly, February 2000–December 2014

Note: Data exclude funds with less than $10 million in total net assets over the February 2000–December 2014 period, mutual funds that invest primarily in other mutual funds, and data for funds in any fund-month where a merger or liquidation takes place.

Source: Investment Company Institute

Modest Outflows from Emerging Markets Equity Funds Even During Times of Market Stress
Net new cash flow as a percentage of assets; monthly, February 2000–December 2014

Note: Data exclude funds with less than $10 million in total net assets over the February 2000–December 2014 period, mutual funds that invest primarily in other mutual funds, and data for funds in any fund-month where a merger or liquidation takes place.

Source: Investment Company Institute

Modest Outflows from Investment-Grade Bond Funds Even During Times of Market Stress
Net new cash flow as a percentage of assets; monthly, February 2000–December 2014

Note: Data exclude funds with less than $10 million in total net assets over the February 2000–December 2014 period, mutual funds that invest primarily in other mutual funds, and data for funds in any fund-month where a merger or liquidation takes place.

Source: Investment Company Institute

Modest Outflows from Government Bond Funds Even During Times of Market Stress
Net new cash flow as a percentage of assets; monthly, February 2000–December 2014

Note: Data exclude funds with less than $10 million in total net assets over the February 2000–December 2014 period, mutual funds that invest primarily in other mutual funds, and data for funds in any fund-month where a merger or liquidation takes place. One observation for the top 10th percentile of funds in July 2002 is hidden to preserve the scale.

Source: Investment Company Institute

Modest Outflows from Multi-Sector Bond Funds Even During Times of Market Stress
Net new cash flow as a percentage of assets; monthly, February 2000–December 2014

Note: Data exclude funds with less than $10 million in total net assets over the February 2000–December 2014 period, mutual funds that invest primarily in other mutual funds, and data for funds in any fund-month where a merger or liquidation takes place. One observation for the top 10th percentile of funds in July 2002 is hidden to preserve the scale. Data also exclude funds designated as alternative strategies.

Source: Investment Company Institute

Modest Outflows from High-Yield Bond Funds Even During Times of Market Stress
Net new cash flow as a percentage of assets; monthly, February 2000–December 2014

Note: Data exclude high-yield funds designated as floating-rate funds. Data exclude funds with less than $10 million in total net assets over the February 2000–December 2014 period, mutual funds that invest primarily in other mutual funds, and data for funds in any fund-month where a merger or liquidation takes place. One observation for the top 10th percentile of funds in January 2001 is hidden to preserve the scale.

Source: Investment Company Institute

Modest Outflows from World Bond Funds Even During Times of Market Stress
Net new cash flow as a percentage of assets; monthly, February 2000–December 2014

Note: Data exclude funds with less than $10 million in total net assets over the February 2000–December 2014 period, mutual funds that invest primarily in other mutual funds, and data for funds in any fund-month where a merger or liquidation takes place.

Source: Investment Company Institute

Modest Outflows from Tax-Exempt Bond Funds Even During Times of Market Stress
Net new cash flow as a percentage of assets; monthly, February 2000–December 2014

Note: Data exclude funds with less than $10 million in total net assets over the February 2000–December 2014 period, mutual funds that invest primarily in other mutual funds, and data for funds in any fund-month where a merger or liquidation takes place.

Source: Investment Company Institute

Read the other entries in this Viewpoints series: 

  • Why Long-Term Fund Flows Aren’t a Systemic Risk: Past Is Prologue
  • Why Long-Term Fund Flows Aren’t a Systemic Risk: Plus Ça Change, Plus C’est La Même Chose
  • Why Long-Term Fund Flows Aren’t a Systemic Risk: Understanding the Data on Institutional and Retail Investors

Sean Collins is ICI’s senior director for industry and financial analysis.

TOPICS: Bond FundBondsFinancial MarketsFinancial StabilityFixed IncomeInvestor ResearchMutual Fund


top
  • About ICI
  • About IDC
  • About ICI Global
  • Privacy and Cookie Policy
  • Apply for User Account
  • Business Continuity
  • Contact ICI

Copyright © 2021 by the Investment Company Institute