The very same week that the stock market bottomed out last year, investors began pouring money back into mutual funds. One year later, the buying binge still shows no signs of letting up.
Every week over the past year, investors have been net purchasers of mutual funds, meaning that they have invested more money than they have pulled out. Between March 12, 2008—just three days after the market hit rock bottom—and last Wednesday, mutual funds (excluding money market funds) pulled in a net total of $507 billion, according to the Investment Company Institute. The ICI puts out new fund-flow statistics each week. With the release earlier today of last week's numbers, the unimpeded buying streak has officially passed the one-year mark.
This shopping spree has been largely fueled by bond funds, which took in a net total of $409 billion over the one-year period. Meanwhile, even in the midst of a bull market, equity funds have experienced quite a bit of turbulence. Over the period in question, investors actually yanked a net total of $8 billion out of domestic stock funds. They were kinder to foreign stock funds, which saw net inflows to the tune of $66 billion. Meanwhile, hybrid funds, which can invest in both stocks and bonds, took in a net total of $40 billion.
This sustained period of inflows has allowed funds to replenish their asset levels, which had fallen sharply during the recession because of a combination of miserable returns and mass outflows. In the second half of 2008, funds experienced net outflows of $211 billion.