Marina Gross, Portfolio Manager for Natixis Investment Managers Solutions joins Yahoo Finance’s On The Move to break down why institutional investors are selling stocks while retail investors seem to be staying put.

Video Transcript

ADAM SHAPIRO: As we continue to move in and out of positive and negative territory on the Dow and the S&P 500. We're going to pay attention to that with our next guest, Marina Gross, who is a portfolio manager for Natixis Investment Managers. And one of the things you point out is that institutional investors are selling, but retail investors are staying pat, at least for now. What other options do I have as a retail investor, since most of us are probably investing via our 401(k)?

MARINA GROSS: Thanks for having me. Yeah, so we're seeing two dichotomies in the market. One is the difference in the way that institutional investors are reacting to, you know, the deteriorating circumstances, both on the sort of health care side and on the economic side and the way that retail investors are reacting.

And part of this, we think, is still a holdover from the 2008 financial crisis where many retail investors started to adjust their portfolios or de-risk far too late into the cycle, far too late into the crisis itself and then had some remorse, had some trouble getting back into the market or kind of gauging when it was safe to re-enter and then had some-- retrospectively, had some remorse where they felt like they weren't fully invested once we experienced the-- you know, sort of the significant bull run and the subsequent eight plus years.

So we think that there's still a holdover from that and still kind of a psychological link to the 2008 crisis. So retail investors, by and large, have been staying pat, and we can see that through the mutual fund flows, while almost all the selling we've seen is really-- has been driven by institutional investors.

So that's the first dichotomy, and the second dichotomy is equity versus fixed. So this is another surprise. Although on the screen, we've seen a lot of forced selling in equities, what we actually see in the numbers is that the most severe selling has been in the fixed-income markets. So last-- on the-- and this is-- when I'm talking about selling, I'm talking about flows, mutual fund flows. So last-- the two weeks prior to this one, we saw about-- let's call it $38 billion in outflows in fixed-income funds. And then what we've seen just this week is $109 billion that's come out of bond funds in total, which is a massive, massive number. So what you see is mostly institutional investors selling as compared with retail.