U.S.: Little traction from QE2 on equity mutual funds flows

U.S. Watch

Three weeks since the official launch of QE2, the U.S. mutual funds industry has yet to record a notable change in investors' attitude towards equity markets. According to weekly data, U.S. domestic equities have recorded net outflows totalling $4.5 billion since November 3. Fixed income products, for their part, have yet to lose their attractiveness in the eyes of investors with a total net inflow of $3.1 billion over the period. As today's Hot Chart shows, the 12-month cumulative inflow of $320 billion in the last twelve months has propelled the share of fixed income products to 25% of total mutual funds assets. This proportion, the highest since 1995, is likely to increase further. Interest rates might be low, but with the median age of mutual fund holders above 50 and with an increasing share of assets being earmarked for retirement, we do not think that households are likely to let their exposure to equities increase significantly from current levels.

http://www.fxstreet.com/fundamental/economic-indicators/us-little-traction-from-qe2/2010-11-24.html