2009 is over, but the year's investing trends may influence the next generation of mutual funds.
In the wake of the "Great Recession," U.S. stocks rebounded heartily last year. However, investors avoided stock funds, pulling out $2.1 billion in November alone, The Wall Street Journal reported
Wednesday in its "Investing in Funds" special report.
Instead, investors devoted assets to bond funds, and "funds with broad, go-anywhere mandates," like BlackRock Global Allocation
and Ivy Asset Strategy Fund
As of November, just three of the 20 best-selling mutual funds were U.S. stock funds; all three of those were index funds, two of them ETFs from Vanguard
and State Street
, the WSJ's Tom Lauricella noted, citing data from FRC
, although he did not mention any specific fund.
So what will 2010 look like? The Journal's Suzanne McGee tackled
the new year's potential risks, asserting that investors need to be weary of liquidity.
"This is not the time to become complacent and assume that because markets are now liquid, we don't need to worry," Erik Davidson
, a managing director at Wells Fargo
told McGee. "All it takes is a shock to the system," and conditions could worsen once again.
Investors should remember that predicting a crisis is impossible, but the likelihood of having one increases as more time passes since the last one.
Fundsters should also be prepared in 2010 for an interesting change. While it may not significantly affect a portfolio, fund prospectuses are slimming down as a result of SEC regulations. The Journal offered a quiz
to test your knowledge of new prospectus rules.
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