Opalesque Industry Update - TrimTabs Investment Research reported today that all equity mutual funds and exchange-traded funds have received a net $45.5 billion in October through Friday, October 25. This month’s inflow is the fifth-highest in any month on record.|
“As Silicon Valley bestows multi-billion dollar valuations on technology outfits with neither revenue nor profits, investors are piling into equity funds at the fastest rate since the technology stock bubble popped in 2000,” said David Santschi, Chief Executive Officer of TrimTabs. “This year’s inflow of $277 billion into all equity funds is the biggest since the inflow of $324 billion in all of 2000.”
In a research note, TrimTabs explained that three of the ten largest monthly inflows into equity funds have occurred this year. The inflows of $66.3 billion in January and $55.3 billion in July were the biggest monthly inflows on record.
“All but three of the ten largest monthly inflows into equity funds occurred in 2000 or 2013,” said Santschi. “Such strong enthusiasm among fund investors should make contrarians nervous.”
TrimTabs also reported that bond funds have posted redemptions for the fifth consecutive month. Bond mutual funds and exchange-traded funds have redeemed $17.8 billion in October, lifting the total outflow in the past five months to $140.6 billion.
“These outflows mark a huge shift for the fixed-income world,” said Santschi. “Not since late 2003 have bond funds posted five monthly outflows in a row.”