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June 18, 2018

Investors Continue to be Net Purchasers of Bond Funds and ETFs in May

by Tom Roseen.

For the first month in three money market funds witnessed net inflows, taking in $59.3 billion for May (their largest monthly net inflows since November 2017). For the third month running the fixed income funds macro-group witnessed net inflows, taking in $6.0 billion. However, for the first month in three stock & mixed-asset funds witnessed net outflows (-$7.9 billion). Authorized participants (APs, those investors who actually create and redeem ETF shares) were net purchasers of stock & mixed-asset ETFs—injecting $24.1 billion. And for the thirty-fifth consecutive month they were net purchasers of bond ETFs—injecting $6.8 billion for May.

Despite the ongoing geopolitical concerns, fund investors continued to embrace international issues. For the eighth consecutive month they were net purchasers of World Equity Funds, injecting $6.8 billion for May. International Multi-Cap Core Funds (+$5.2 billion) remained at the top of the World Equity Funds classifications. APs were net purchasers of three of the five equity-based ETF macro-classifications: U.S. Diversified Equity (USDE) ETFs (+$24.3 billion), Sector Equity ETFs (+$2.8 billion), and Alternatives ETFs (+$597 million), while being net redeemers of World Equity ETFs (-$3.6 billion) and Mixed-Asset ETFs (-$28 million). In this segment I highlight the May fund-flow results for both types of investment vehicles.

Highlights:

  • For the second month running mutual fund investors were net purchasers of fund assets, injecting $57.4 billion into the conventional funds business for May. For the first month in three money market funds (+$59.3 billion) witnessed net inflows, while for the third month in a row investors were net purchasers of fixed income funds (+$6.0 billion). Stock & mixed-asset funds (-$7.9 billion) suffered net redemptions.
  • For the eighth consecutive month Thomson Reuters Lipper’s World Equity Funds macro-classification witnessed net inflows, attracting $6.8 billion for May.
  • For the second month in a row APs were net purchasers of ETFs, injecting $30.9 billion for May. APs padded the coffers of stock & mixed-asset ETFs and bond ETFs, injecting a net $24.1 billion and $6.8 billion, respectively.
  • For the second month in a row USDE ETFs (+$24.3 billion for May) attracted the largest net draw of the five broad-based equity ETF macro-classifications.

Click here to download the May 2018 FundFlows Insight Report: Investors Continue to be Net Purchasers of Bond Funds and ETFs in May.

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