Net flows of mutual funds (MFs) and exchange-traded funds (ETFs)

Sources: FactSet and Wells Fargo Investment Institute. Annual data from January 1, 2012 to August 31, 2021. For illustrative purposes only. Data compiled by Investment Company Institute (ICI). Data represents net new cash flows of mutual funds and net issuance of shares of ETFs. Numbers rounded to the nearest whole number. For number of funds in each category according to ICI please refer to https://www.ici.org/research/stats/trends_08_21. For definitions and components of each category according to ICI please refer to https://www.ici.org/research/stats/iob_update/iob_definitions. EM = emerging market. YTD = year to date.

Key Takeaways

  • Investors have decreased their equity exposure but have increased their fixed-income and cash holdings.
  • Investors have continued to reduce their net U.S. equity allocations this year. This has been an ongoing trend since 2015.
  • Barring an unexpected recession, the equity bull market could be extended as many retail investors have yet to participate in the current rally.