September 8, 2017

U.S. Fund-Flows Weekly Report: Investors Turn to Money Market Funds

by Patrick Keon.

Thomson Reuters Lipper’s fund macro-groups (including both mutual funds and ETFs) had net inflows of $7.5 billion for the fund-flows week ended Wednesday, September 6. The overall positive flows were driven by money market funds (+$6.8 billion), while taxable bond funds (+$1.6 billion) and municipal bond funds (+$250 million) also contributed to the total net inflows. Equity funds (-$1.1 billion) was the only fund macro-group that saw net money leave for the week.

Market Overview

The results from the Dow Jones Industrial Average (-0.39%) and the S&P 500 Index (+0.32%) were mixed for the fund-flows trading week. Both indices suffered their only daily losses for the week (Dow -1.07% and S&P 500 -0.76%) on Tuesday, September 5. The markets were driven down that day by heightened geopolitical tensions caused by North Korea’s claim of having tested a hydrogen bomb over the long Labor Day weekend. Both indices rebounded the next day (Dow +0.25% and S&P 500 +0.31%) on the strength of the news that President Donald Trump and the U.S. Congress had reached a bipartisan deal to extend the U.S. debt limit to December 8. This agreement would enable the federal government to provide disaster relief to those impacted by Hurricane Harvey as well as to avoid shutting down the U.S. government.


ETFs had net inflows (+$2.0 billion) for the ninth consecutive week. All three ETF macro-groups took in net new money, led by taxable bond ETFs (+$1.1 billion), with equity and municipal bond ETFs contributing $833 million and $2 million, respectively.

Equity Mutual Funds

Equity mutual funds suffered net outflows (-$1.9 billion) for the eleventh consecutive week. Once again, domestic equity funds (-$2.1 billion) were responsible for all the net-negative flows, while nondomestic equity funds had net inflows of just over $200 million.

Fixed Income Mutual Funds

Taxable bond mutual funds had net inflows of $420 million for the week. The net-positive flows were driven by the Core Plus Bond Funds ($425 million), High Yield Funds (+$277 million), and Multi-Sector Income Funds (+$263 million) peer groups. Municipal bond funds also took in net new money (+$248 million) for the week on the strength of the inflows into the High Yield Muni Debt Funds (+$166 million) peer group.

Money Market Mutual Funds

Money market mutual funds took in $6.8 billion of net new money for the week, marking the group’s sixth positive net flows in the last seven weeks. The Institutional U.S. Treasury Money Market Funds (+$5.5 billion) and Institutional U.S. Government Money Market Funds (+$1.9 billion) peer groups were the largest contributors to this past week’s net inflows.

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