June 1, 2018

U.S. Fund-Flows Weekly Report: Funds Take in Net New Money for the Sixth Straight Week

by Patrick Keon.

Thomson Reuters Lipper’s fund asset groups (including both mutual funds and ETFs) had net-positive flows of $14.5 billion for the fund-flows week ended Wednesday, May 30. The week’s net inflows were for a sixth straight week, during which time the fund universe grew its coffers by $69.7 billion. This past week’s positive flows were led by money market funds (+$9.4 billion) and equity funds (+$4.9 billion), while taxable bond funds and municipal debt funds contributed $158 million and $77 million to the total net inflows.

Market Overview

For the first week in four the Dow Jones Industrial Average (-0.88%) and the S&P 500 Index (-0.34%) both lost ground. The week’s losses pushed the the Dow (-0.21%) into the red for the year to date, while the S&P 500 Index held onto a small 1.89% gain. Both indices suffered the lion’s share of their losses on May 29, triggered by the political turmoil in Italy. The Dow and the S&P 500 closed down 1.58% and 1.16%, respectively, that day on news that Italy may hold new elections in July, since the new prime minister failed to receive support from any of the major political parties. The indices bounced back the next day (each gained approximately 1.25%) as a potential solution for Italy seemed to be in the works and rising oil prices rallied energy stocks.

ETFs

ETFs had positive net flows (+$4.3 billion) for the eighth straight week. The net inflows were dominated by equity ETFs (+$4.3 billion), with the largest individual positive flows belonging to PowerShares QQQ (QQQ, +$1.1 billion) and iShares Edge MSCI Minimum Volatility USA ETF (USMV, +$931 million). Municipal debt ETFs contributed $166 million to the total net inflows, while taxable bond ETFs suffered net outflows of $217 million.

Equity Mutual Funds

Equity mutual funds took in $526 million of net new money for the week. Nondomestic equity funds experienced net inflows (+$895 million), while domestic equity funds saw money leave (-$369 million). The largest net-positive flows among nondomestic equity funds belonged to Lipper’s International Multi-Cap Growth Funds classification (+$433 million), while the largest net-negative flows among domestic equity funds were attributable to Large-Cap Value Funds (-$381 million).

Fixed Income Mutual Funds

Taxable bond mutual funds (+$375 million) took in net new money for the week, while municipal bond mutual funds suffered slight net outflows (-$89 million). The largest net inflows for taxable bond funds belonged to Ultra-Short Obligation Funds (+$562 million) and Loan Participation Funds (+$444 million). For muni debt funds Short/Intermediate Muni Debt Funds and Short Muni Debt Funds suffered net outflows of $68 million and $57 million, respectively, while the High Yield Muni Debt Funds peer group (+$205 million) had the largest net inflows.

Money Market Mutual Funds

Money market mutual funds took in $9.4 billion of net new money—for their sixth straight weekly net inflows. The Institutional U.S. Treasury Money Market Funds (+$6.0 billion) and Institutional U.S. Government Money Money Market Funds (+$5.2 billion) peer groups were responsible for the lion’s share of the positive net flows.

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