by Pat Keon, CFA.
Lipper’s fund asset groups (including both mutual funds and ETFs) took in almost $20.3 billion in net new money for the fund-flows trading week ended Wednesday, March 6. Net inflows were driven by money market funds (+$28.0 billion), while municipal bond funds contributed $798 million to the total. Equity funds (-$7.0 billion) and taxable bond funds (-$1.5 billion) both saw money leave their coffers. The net negative flows for taxable bond funds broke a streak of eight consecutive weekly net inflows.
The major equity indices all finished down for the fund-flows trading week. The Dow Jones Industrial Average, S&P 500 Index, and the NASDAQ Composite Index fell 1.20%, 0.75%, and 0.64%, respectively. It was the first weekly losses (as measured by the fund-flows week, which is Wednesday to Wednesday) of the year for the S&P 500 and the Dow, and only the second for the NASDAQ. Year-to-date, all of the indices have double digit gains, led by the NASDAQ (+13.12%), with the S&P 500 (+10.56%) and the Dow (+10.06%) not far behind.
ETFs suffered net outflows of $4.1 billion for the week, driven by taxable bond ETFs (-$2.6 billion) and equity ETFs (-$1.6 billion). Municipal debt ETFs had net positive flows of $85 million for the week. For taxable bond ETFs, the largest net outflows belonged to iShares iBoxx $ High Yield Corporate Bond ETF (HYG, -$1.4 billion) and iShares 20+ Year Treasury Bond ETF (TLT, -$541 million), while for equity ETFs SPDR Gold ETF (GLD, -$899 million) and iShares Russell 2000 ETF (IWM, -$787 million) were hit the hardest.
Equity Mutual Funds
Equity mutual funds (-$5.3 billion) experienced net negative flows for the third straight week. Domestic equity (-$3.7 billion) and nondomestic equity funds (-$1.6 billion) both contributed to the net outflows. Despite these outflows, both nondomestic (+$7.4 billion) and domestic funds (+$4.3 billion) have experienced positive net flows year-to-date. The biggest contributors to this week’s net outflows were Small-Cap Core Funds (-$755 million) and International Multi-Cap Growth Funds (-$627 million).
Fixed Income Mutual Funds
Both the taxable bond (+$1.1 billion) and muni debt (+$713 million) mutual fund groups recorded net inflows for the week. It was the ninth straight week of net positive flows for the muni debt group and the eighth straight for taxable bond funds. Core Bond Funds paced the taxable bond group with net inflows of $1.3 billion, while Ultra Short Obligation Funds contributed $881 million. For the muni debt funds group, the net inflows were dominated by High Yield Muni Debt Funds (+$343 million) and Intermediate Muni Debt Funds (+$284 million).
Money Market Mutual Funds
Money market funds took in almost $28.0 billion in net new money for the week. All of the money market funds peer groups had net inflows for the week, led by Institutional U.S. Government Money Market Funds (+$18.6 billion) and Money Market Instrument Funds (+$3.7 billion).