December 17, 2018

Mutual Fund Investors and APs Take Different Paths in November

by Tom Roseen.

For the first month in three, investors were net purchasers of mutual fund assets, injecting $9.4 billion into the conventional funds business (excluding ETFs) for November. Despite equity funds posting plus-side returns for the month, worries about slowing global growth, global trade, and declining oil prices kept investors on edge. For the second month in a row, the fixed income funds macro-group witnessed net outflows, handing back $26.4 billion for the month. And for the seventh consecutive month, stock & mixed-asset funds witnessed net outflows (-$47.1 billion for November, their largest monthly net outflows since November 2016), while money market funds (+$82.9 billion, for their second month of inflows in four) witnessed the only net inflows—their largest since December 2008.

For the fifth month in a row, ETFs overall witnessed net inflows, taking in $49.0 billion for November—their largest monthly net inflows since January 2018. Authorized participants (APs, those investors who actually create and redeem ETF shares) were net purchasers of stock & mixed-asset ETFs, adding $33.2 billion to the equity ETF coffers. And for the fortieth month in 41, they were net purchasers of bond ETFs—injecting $15.8 billion for November. APs were net purchasers of four of the five equity-based ETF macro-classifications: USDE ETFs (+$22.4 billion), World Equity ETFs (+$11.8 billion), Alternatives ETFs (+$682 million), and Mixed-Asset ETFs (+$239 million), while being net redeemers of Sector Equity ETFs (-$1.9 billion). In this segment I highlight the November fund-flow results for both types of investment vehicles.

Highlights:

  • For the first month in three, mutual fund investors were net purchasers of fund assets, injecting $9.4 billion into the conventional funds business for November.
  • For the second month running, fixed income funds (-$26.4 billion for November, their largest monthly net outflows since August 2013) witnessed net outflows, while for the seventh month in a row, investors were net redeemers of stock & mixed-asset funds (-$47.1 billion). Money market funds (+$82.9 billion) witnessed the only net inflows.
  • For the fifth month running, authorized participants (APs) were net purchasers of ETFs, injecting $ 49.0 billion for November. APs were net purchasers of stock & mixed-asset ETFs (+$33.2 billion) and fixed income ETFs (+$15.8 billion).
  • However, for the second month in a row, APs were net redeemers of Sector Equity ETFs (-$1.9 billion for November).

Click here to download the November 2018 FundFlows Insight Report: Mutual Fund Investors and APs Take Different Paths in November.

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