The State of the Mutual Fund Industry in 2015

Welcome to Please help us personalize your experience.

Select the one that best describes you

Thank you!

Check your email and confirm your subscription to complete your personalized experience.

Thank you for your submission, we hope you enjoy your experience

Woman handling money


The State of the Mutual Fund Industry in 2015

Bob Ciura Oct 09, 2015

As the market has performed fairly poorly this year, many mutual funds have posted losses throughout 2015. After all, the S&P 500 Index is down 4% year-to-date. This will inevitably bring down many mutual fund classes along with it, and after including fees and expenses, performance of many mutual funds may disappoint investors.

However, there is still an argument to be made for sticking with high-quality mutual funds, and the market in general.

Investors Losing Their Appetite for Equity Mutual Funds

Flows have trended downward more recently as well. In September, equity funds posted outflows in three out of the four weeks. Equity fund outflows totaled $19.1 billion while inflows totaled $12.7 billion, according to Lipper. That equates to a net outflow of $6.4 billion.

Of course, this is no surprise given fund flows tend to track the performance of the broader market in general. As the market has declined this year, investors have taken money out of mutual funds, using them as a source of funds and a means to reduce exposure to the perception of future market declines. The equity market had enjoyed a six-year, virtually uninterrupted rise since the financial crisis. At some point, volatility was bound to return.

Bond Mutual Funds Reap the Benefits

For example, taxable bonds and municipal bonds have posted decent across-the-board gains in the third quarter, and longer-duration bonds outperformed intermediate-term bonds. This is because bond prices increase when yields decline since price and yield are inversely related.

The Bottom Line

For investors with a long-term time horizon, it makes sense to use market downturns to add to mutual funds since those funds can be purchased at more attractive prices.

Popular Articles

Download Our Free Report

Why 30 trillion is invested in mutual funds book