For the third consecutive week investors were net purchasers of overall fund assets (including those of conventional funds and ETFs), injecting $20.5 billion for Thomson Reuters Lipper’s fund-flows week ended August 8, 2018. But, despite continued strong corporate earnings and a fair nonfarm-payrolls report during the week, fund investors were net redeemers of equity funds (-$962 million), while they padded the coffers of money market funds (+$16.6 billion), taxable bond funds (+$4.2 billion net), and municipal bond funds (+$623 million net).
For the quarter to date through the week ended Wednesday, August 8, investors have injected a net $5.0 billion into equity ETFs (+$19.6 billion) and equity mutual funds (-$14.6 billion). Investors have remained enamored of international equity funds (+0.99% return) for the quarter to date, injecting $3.7 billion net, followed by small-cap funds (+$3.2 billion, +2.90% return) and sector-technology funds (+$2.6 billion, +3.53% return).
Despite sporting the strongest QTD return of all the equity macro-groups, large-cap funds (+4.82% return) have witnessed the largest net redemptions, handing back some $5.3 billion, bettered by global equity funds (+3.01% return), which have witnessed net redemptions of $3.7 billion, and equity income funds (+4.17% return and -$790 million net).
Shrugging off the rising interest rates, investors have continued to pad the coffers of fixed income funds QTD, injecting $14.4 billion net into taxable fixed income mutual funds (+$5.7 billion) and ETFs (+$8.7 billion) and $29.7 billion net into money market funds.
Despite narrowing spreads and the Treasury yield curve shifting up in July, investors have injected $11.2 billion net into corporate investment-grade debt funds for the QTD, followed by government-Treasury funds (+$4.9 billion) and municipal bond funds (+$2.8 billion). At the opposite end of the spectrum flexible funds (-$3.0 billion), balanced funds (-$2.8 billion), and government-mortgage funds (-$735 million) have suffered the only net redemptions QTD of the fixed income fund macro-groups. From a performance perspective world taxable fixed income funds (+0.91%) have witnessed the strongest return QTD, followed by long-term taxable bond funds (+0.72%) and short-/intermediate-term municipal debt funds (+0.16%). Long-term municipal debt funds (+0.06%) have posted the lowest relative return of the fixed income macro-groups.
