July 6, 2018

U.S. Fund-Flows Weekly Report: Funds Suffer Net Outflows for the Fourth Straight Week

by Patrick Keon.

Thomson Reuters Lipper’s fund asset groups (including both mutual funds and ETFs) had net-negative flows of approximately $10.5 billion for the fund-flows week ended Tuesday, July 3. All the asset groups saw net money leave their coffers, with equity funds taking the biggest hit with net outflows of $8.3 billion. (This was the fifth straight weekly net outflows for the equity fund group.) The week’s outflows for taxable bond funds (-$1.8 billion) broke a string of three straight net-positive weekly flows, while municipal bond funds (-$189 million net) had a streak of eight straight weekly net inflows snapped. Money market funds had net-negative flows of $244 million for the week.

Market Overview

Both the S&P 500 Index (+0.50%) and the Dow Jones Industrial Average (+0.24%) recorded gains in the Independence Day-shortened week of trading. Despite the continued uncertainty over trade policy, the markets took strength from a rally from the technology and financial sectors as well as positive economic data. Illustrating that the U.S. economy was continuing to grow, the Personal Consumption Expenditures Index (the Federal Reserve’s preferred measure of inflation) hit the Fed’s 2.0% target for the first time in six years.

ETFs

ETFs had net outflows (-$4.2 billion) for the fifth straight week, once again driven by equity ETFs (-$4.7 billion). The largest net outflows among equity ETFs belonged to SPDR S&P 500 ETF (SPY, -$1.7 billion), iShares MSCI EAFE ETF (EFA, -$802 million), and SPDR Gold ETF (GLD, -$735 million). Taxable bond ETFs took in net new money (+$558 million), while muni debt ETFs had a slight net inflow of $15 million. The most significant net inflows among the taxable bond ETF group belonged to iShares 20+ Treasury Bond ETF (TLT, +$581 million) and iShares iBoxx $Investment Grade Corporate Bond ETF (LQD, +$417 million).

Equity Mutual Funds

Equity mutual funds (-$3.6 billion) experienced their second straight week of net outflows. Both domestic equity funds (-$3.3 billion) and nondomestic equity funds (-$236 million) contributed to the total net outflows.

Fixed Income Mutual Funds

The taxable bond and muni debt mutual funds groups both suffered net outflows for the week. Taxable bond funds saw $2.4 billion leave (for their second straight week of net outflows), while the outflows from the muni debt group (-$175 million) were more muted. The largest net outflows for taxable bond funds belonged to the Core Bond Funds (-$531 million), Corporate Debt Funds BBB-Rated (-$377 million), and High Yield Funds (-$339 million) peer groups. The lion’s share of the net outflows from muni debt funds came from the Short/Intermediate Muni Debt Funds (-$121 million) and Short Muni Debt Funds (-$51 million) peer groups.

Money Market Mutual Funds

Money market funds suffered small net outflows of $244 million for the week. The largest net outflows belonged to the Institutional U.S. Government Money Market Funds (-$4.0 billion) and Institutional Money Money Market Funds (-$3.0 billion) peer groups and were offset by net inflows into U.S. Government Money Market Funds (+$2.9 billion) and Money Markets Funds (+$1.1 billion).

 

 

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