The S&P 500 hit an all-time high in August. Investors ran out the door.
A record amount of money, more than $50 billion, left the building.
You might think that it’s a continued torrent of investors bailing on actively managed mutual funds, but that’s not at all the case. From Morningstar’s U.S. Fund Flows Batter Equity Funds in August (emphasis mine):
The hardest-hit equity style-box category was large blend. Those funds posted a record $32 billion of outflows, topping the previous record of $24 billion set in April 2020. It was also the category’s fifth consecutive month of outflows–the longest such streak in data going back to 1993. More than 70% of its August outflows came from passively managed funds. Nearly $10 billion left Vanguard Total Stock Market Index (VITSX), the largest fund in the United States by total assets, but market appreciation offset those redemptions and pushed the fund to nearly $1 trillion.
Meanwhile, investors can’t get enough of taxable bond funds with yields the size of Mugsy Bogues. Investors plowed $77 billion into the category in August. Go figure.