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Long-Term Fund Outflows Drop to $5B in September


Investors withdrew $5 billion from U.S. stock and bond long-term funds in September, Strategic Insight reports. This was a "significant improvement" from August, when open-end and closed-end mutual funds (excluding ETFs and VA sub-accounts) were hit with $33.6 billion in outflows following the downgrade of the U.S. debt rating.

For the third quarter, redemptions totaled $55 billion, essentially negating the $51 billion in inflows in the second quarter. This was the worst quarter for long-term funds since the last quarter of 2008, when outflows totaled $187 billion. For the first nine months of the year, long-term funds have experienced net inflows of $84 billion-with $37 billion being taken out of U.S. stock funds, international stock funds reaping $49 billion, and bond funds receiving $72 billion in assets.

Plan Participants Question

Traditional 401(k) Savings

In the wake of economic and stock market volatility, many 401(k) investors are questioning the wisdom of 401(k), 403(b) and 457 plans, a survey by Allianz Life Insurance Company finds.

More startling, perhaps, 27% said saving money under their mattress is the safest place to put it.

As for saving for their children's college education, 25% have either reduced or stopped saving, and 44% haven't started putting money away for their children's higher education at all.

Nearly a third, 30%, have either stopped saving for retirement or cut back on their contributions, and a full 28% haven't even started saving for retirement in the first place.

Forty-seven percent of those not yet retired say the economy has had an impact on their retirement savings habits. Among those still saving, 20% said they have had to cut back on other areas in order to continue to afford to save.

"Given the gut-wrenching events and market volatility of late summer, consumers are questioning traditional retirement savings vehicles and changing their savings habits," said Katie Libbe, vice president of consumer insights at Allianz Life.

"Recent events have only deepened the uncertainty many have felt about retirement since the market meltdown of 2008 when the average 401(k) account balance lost nearly 30%," the Allianz vice president said.

The Hartford Launches

'It's In Your Power' Ads

The Hartford is taking part in this week's National Save for Retirement Week with the "It's In Your Power Campaign," based on superheroes. The campaign, aimed at 1.4 million participations in 32,500 plans, shows two superheroes flying around on scooters and generally just enjoying being retired.

The campaign also offers five free superpower-inspired ringtones that participants can download to their cellphone to reinforce the message. The sounds are: Wham! Whoosh! Pow! Zoinks! and Action!

"The Hartford is telling retirement plan participants that 'It's In Your Power' to help build a secure retirement," said Dana McCullough, marketing assistant vice president. MME