Fund flows
Fund Flows
2. In mutual funds, the balance of money going into and coming out a mutual fund.
Fund flows.
Fund flows are the traffic of money into and out of mutual funds or between funds that invest in various sectors.
This flow of money is considered an indicator of the direction the markets are headed. For example, large inflows of money into mutual funds may be interpreted as a bullish indicator for the stock market or for a specific sector, while dramatic outflows may signify an impending downturn.
However, if investors chase past performance or follow the currently hot sectors in deciding where to invest, large inflows may in fact precede disappointing performance.