The U.S. stock market is up almost 20% this year, but investors have missed out on much of the rally in stocks: They’ve sold equities and piled into bonds and money market funds — effectively low-yield savings accounts — largely out of fear.
What’s happening: Institutional money managers and retail investors around the world have pulled a net $140.6 billion out of equity funds in 2019, according to data from Lipper, which tracks $49.1 trillion of assets.
The “Twilight Zone” environment, in which equity prices have risen despite net selling of stocks by investors, is taking place all over the world.
Investors have bought bonds — a net $255.5 billion so far this year — even though more than $13 trillion of bonds currently hold negative yields, meaning investors lose money by holding them.
What it means: “People don’t trust the stock market,” Emily Roland, head of capital markets research at John Hancock Investment Management, tells Axios. “I’m more concerned about that than I am about the FOMO trade.”