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Michael Cagney |
Though mutual fund investments tumbled dramatically during the chaos of 2008’s economic meltdown, with skittish investors clamoring to redeem their positions in a panic-selling frenzy, mutual fund investors have since come roaring back. Post-crisis net inflows into stock and bond funds have exceeded their pre-crisis numbers, with some $390 billion in new investments funneled into U.S.-domiciled funds in 2009, followed by $228 billion in 2010.
Thus far 2011 has been a mixed bag, with the first half of the year witnessing strong inflows, only to see virtually all of those positive flows reversed in July and August. While over the long term, mutual funds inflows are indisputably on the climb, it remains to be seen which company’s boards will capably handle the increased flow volatility that comes with this level of capital activity and which will succumb to performance dips, unfavorable tax consequences ....