by Patrick Keon.
Thomson Reuters Lipper’s fund macro-groups (including both mutual funds and ETFs) took in $15.0 billion of net new money for the fund-flows week ended Wednesday, October 18. This number represented the eighth highest weekly net inflows for the year to date. All four of Lipper’s fund macro-groups experienced net-positive flows, paced by equity funds at $5.4 billion, followed by money market funds (+$5.1 billion), taxable bond funds (+$4.0 billion), and municipal bond funds (+$536 million). It was the fifteenth consecutive week of net inflows for the taxable bond fund group.
The fund-flows trading week ended with the Dow Jones Industrial Average closing above 23,000 for the first time ever. The Dow closed at 23,157.60 for the week, for a weekly gain of 1.24%. The bulk of the Dow’s weekly gain occurred on the last trading day (+0.70%) and was driven by IBM. IBM experienced its largest one-day percentage gain since 2009 on the strength of its better-than-expected earnings results. The Dow appreciated 17.18% for the year-to-date period and 26.32% since Election Day 2016. The S&P 500 Index also put up positive numbers during these periods: 0.24% for the week, 14.40% for the year to date, and 19.71% since Election Day. For comparative purposes the Dow gained just 5.21% for 2016 through Election Day and actually lost 2.23% for 2015. The numbers were roughly the same for the S&P 500 Index, with a gain of 4.68% and a loss of 0.73%. While the Trump administration has had trouble pushing its agenda through Congress (healthcare, immigration, tax reform) and has seen its share of controversy (Russia, North Korea, personnel changes, Twitter), it surely has been good for the stock market.
ETFs took in $13.8 billion of net new money during the past week. The lion’s share of the net-positive flows came from equity ETFs (+$12.3 billion), while taxable bond ETFs (+$1.2 billion) and municipal bond funds (+$185 million) also contributed to the total. For equity ETFs SPDR S&P 500 (SPY, +$4.6 billion) and iShares Core MSCI Emerging Markets (IEMG, +$1.4 billion) contributed the two largest net-positive flows. The largest net inflows among the taxable bond ETF group belonged to iShares Core US Aggregate Bond (AGG, +$609 million) and iShares iBoxx Investment Grade Corporate (LQD, +$534 million).
Equity Mutual Funds
Equity mutual funds experienced their seventeenth straight week of net-negative flows (-$7.0 billion). This past week all the net outflows came from domestic equity funds (-$7.9 billion), while nondomestic equity funds had net-positive flows of $935 million. The largest net outflows among domestic equity funds belonged to Lipper’s Large-Cap Core Funds peer group (-$4.2 billion), while the largest net outflows among nondomestic equity funds were attributable to the International Multi-Cap Growth Funds (+$244 million) category.
Fixed Income Mutual Funds
Taxable bond mutual funds (+$2.8 billion) took in net new money for the fifth straight week. The largest net inflows in the taxable bond fund macro-group belonged to Core Plus Bond Funds (+$848 million) and Core Bond Funds (+$637 million). Municipal bond funds had net inflows of $351 million for the week, driven by the High Yield Muni Debt Funds peer group (+$210 million).
Money Market Mutual Funds
Money market mutual funds took in $5.1 billion of net new money for the week. These positive flows were driven by the Institutional U.S. Government Money Market Funds (+$4.4 billion) and Institutional Money Market Funds (+$1.5 billion) peer groups.
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