January 17, 2018

Equity ETFs Extend Winning Streak to 19 Months, While Equity Mutual Funds Suffer a Tenth Month of Net Redemptions

by Tom Roseen.

Once again, in December conventional mutual fund investors continued their search for yield and safe-haven vehicles, padding the coffers of fixed income funds and money market funds, while authorized participants (APs—those investors that actually create and redeem ETF shares) kept the equity pedal to the metal. Despite relative strong returns, mutual fund investors continued to turn their backs on stock & mixed-equity funds, redeeming some $34.8 billion for the month, while for the nineteenth consecutive month APs were net purchasers of stock & mixed-equity ETFs, injecting $47.3 billion. On the fixed income side of the equation the focus of mutual fund investors and APs remained aligned, with conventional bond funds attracting $15.2 billion net for December and bond ETFs drawing in $5.2 billion. In this segment I highlight the December and 2017 fund-flow results for both types of investment vehicles.

Highlights:

  • For the sixth straight month mutual fund investors were net purchasers of fund assets, injecting a net $24.9 billion into the conventional funds business. Fixed income funds (+$15.2 billion) and money market funds (+$44.5 billion) witnessed net inflows for December, while investors once again were net redeemers of stock & mixed-asset funds (-$34.8 billion).
  • For the third month in a row Thomson Reuters Lipper’s World Equity Funds macro-classification witnessed net inflows, taking in $4.2 billion for December.
  • For the twenty-third consecutive month authorized participants (APs) were net purchasers of ETFs, injecting $52.4 billion for December. APs injected a net $47.3 billion into stock & mixed-asset ETFs and were net purchasers of bond ETFs, injecting a net $5.2 billion.
  • For the third straight month USDE ETFs (+$32.0 billion for December) attracted the largest net draw of the five broad-based equity ETF macro-classifications.

Click here to download the December 2017 FundFlows Insight Report: Equity ETFs Extend Winning Streak to 19 Months, While Equity Mutual Funds Suffer a Tenth Month of Net Redemptions.

Thomson Reuters Lipper delivers data on more than 265,000 collective investments in 61 countries. Find out more.

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