Investors Continue to Take Money Out of U.S. Equity Mutual Funds

For a ninth consecutive week, despite a bullish 2012 outlook from Wall Street and a December rally that’s carried over into the New Year, investors withdrew money out of United States equity mutual funds. Those funds lost $1.1 billion in the week ended Wednesday, which did not include exchange traded funds, according to data from Lipper FMI. Adding to the bullish tone on Friday, was a better-than-expected jobs report, and the S&P 500 Index began 2012 with a 1.6% surge.

This follows a $1.7 billion outflow in the previous week. Investors put money into taxable and municipal bond funds instead. “Trends remained largely intact as we moved into the first week of 2012,” said Daniel Fannon, a financial analyst with Jefferies, who cited the data in a note to clients. Goldman Sach’s (NYSE:GS) consensus calculation shows that on average Wall Street strategists expect the United States benchmark to increase by 7% this year.

However, the market seers generally cite a strong domestic economy overshadowing the credit crisis in Europe. Co-founder of TradeMonster.com Jon Najarian said, “It also means we could have more people chasing the market higher if this move hits 1300 in the S&P 500.”

Further Reading: Here’s Why Groupon, Ford and 8 Stocks Trended Strongly to Start 2012>>

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