Flash crash aftermath? Mutual funds hardly hit

The recent turbulence in global stock markets prompted just a small portion of mutual fund investors to pull out of stocks in May, according to research firm Strategic Insight. According to Strategic Insight, there were $16 billion in net outflows from equity mutual funds last month. Bond funds, meanwhile, which experienced $8 billion in net inflows in May, continued to represent the high ground for investors. The total net outflows of stock and bonds funds combined were dubbed by Strategic Insight as “modest redemptions,” compared with nearly $170 billion worth of net outflows from stock and bond funds over the first four months of 2010. “In the context of nearly $7 trillion in stock and bond fund assets, May’s outflows are moderate,” Avi Nachmany, Strategic Insight’s director of research, said in a statement. “This speaks to the loyalty that long-term investors have to the mutual fund vehicle,” he said. “Given global economic worries, risk aversion should continue to trigger bond fund demand.” He added that some investors might still see the stock market dips as buying opportunities. The S&P 500 fell by 8% in May.