Fund flows

Fund Flows

1. In municipal bonds, a statement indicating a list of priorities for which the municipality will use the funds raised by the bond. Generally speaking, the flow of funds priorities begin with maintenance of city functions, followed by operations, debt service, expansion of the city's facilities, and reserving cash prepay debt.

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.