Investors pulled another $19 billion from equity funds as the volatility continues to rattle the markets ahead of next week's Fed policy meeting. Bobbi Rebell reports.
The recent volatility in the stock market not going over well with investors. They pulled another $19 billion from equity funds over the past week, according to Bank of America/Merrill Lynch. Where's the money going? Government debt and U.S. Treasury funds receiving $1.4 billion, their tenth straight week of inflows. Investors looking for safety. There are fears of an economic crisis in China, and sluggish global growth, not to mention the impact if the Federal Reserve decides to raise U.S. interest rates for the first time in almost a decade. But investors are overacting, says Wells Fargo Funds Management's John Manley. (SOUNDBITE) JOHN MANLEY, CHIEF EQUITY STRATEGIST, WELLS FARGO FUNDS MANAGEMENT (ENGLISH) SAYING: "I think, they are wrong. And, I think, what is happening is that we are getting scared." There's a couple ways this could play out says Jeff Tjornehoj from Lipper. (SOUNDBITE) JEFF TJORNEHOJ, HEAD OF LIPPER AMERICAS RESEARCH (ENGLISH) SAYING: "One is that everyone gets comfortable with the Fed either raising rates in September or December, and we return to the typical volatility that we had earlier this spring before summer turned things a little on its head. Or, we continue to see investors take a more sour and sour attitude toward equities as they seem to get ahead of the headlines a little bit, and we could see more softness." The data, which also includes flow figures from data provider EPFR Global, showed that global equity funds had shed $46 billion over the past four weeks.