Investors flooded US equity mutual funds and exchange-traded funds with $54.2 billion in October. According to Trim Tabs Investment Research on Sunday, this is the third-largest recorded inflow on record.

Trim Tabs also added that three of the largest monthly equity funds inflows occurred this year. The total of US$286 billion inflow is the biggest recorded since 2000.

Trim Tabs Investment Research chief executive officer David Santschi said a short-term pullback would be expected at a time like this when fund investors are very enthusiastic and are drawn to riskier assets.

While the inflow in the equity mutual funds is huge, the outflow is a cause of concern because fund investors keep dumping bonds. For this year, those funds have incurred a total of $31 billion in losses. Santschi says this indicates a dramatic change in the fixed-income sector.

Meanwhile, the Trim Tabs research showed that the US economy lagged in October while real wages increased by a mere 0.5 percent year over year.