Wealthy Boomer Jonathan Chevreau told us that in September and October mutual fund investors in Canada withdrew huge amounts from their mutual funds while ETFs were simultaneously experiencing large net purchases, notably of iShares broad-based S&P TSX60 Canadian Market Index (symbol XIU).
The iShares Canada press release touting these results also mentions the same thing happening in the USA: "As of July, the United States saw ETF inflows at US$41 billion as compared to US mutual fund outflows of US$47
billion.", citing its source as Investment Company Institute, August 2008.
It is interesting to speculate whether this is actual switching from mutual funds to ETFs in a kind of deathbed conversion or if it is simply symptomatic of two groups of investors with different mindsets and reactions to the market woes, i.e. the mutual fund sellers think the market decline is the end of the world while the ETF buyers see it as a buying opportunity for the long term. I vote for the latter interpretation.