by Pat Keon, CFA.
Lipper’s fund asset groups (including both mutual funds and ETFs) experienced net inflows of $4.9 billion for the fund-flows trading week ended Wednesday, April 24. Taxable bond funds (+$6.4 billion) and municipal debt funds (+$1.6 billion) took in almost $8.0 billion combined for the week, while money market funds contributed $4.3 billion to the total positive flows. Equity funds (-$7.3 billion) were the only asset group to suffer net outflows for the week.
The major equity indices all recorded gains for the fund-flows trading week. The NASDAQ Composite Index (+1.32%) paced the positive returns, while the S&P 500 Index and the Dow Jones Industrial Average were up 0.92%% and 0.56%, respectively. The indices have carried their strength from the first quarter (in which all three recorded double-digit increases) into the second quarter as the NASDAQ, S&P 500, and the Dow are up 4.82%, 3.28%, and 2.58%, respectively, for the quarter to date. Strong economic data as well as solid corporate earnings results were the driving forces behind this week’s market gains. Retail sales spiked 1.6% in March, the largest increase since September 2017, indicating that there was strong growth in Q1. Additionally, state unemployment claims fell for the fifth straight week, down to 192,000, which represented its lowest level in almost 50 years (September 1969). These upbeat economic indicators were supplemented by positive results from corporate earnings season. Companies driving the market with their earnings results included Twitter, Coca-Cola, and United Technologies.
The ETF universe suffered net outflows (-$3.3 billion) for the first week in four. Equity ETFs (-$3.7 billion) were responsible for all of the net outflows while muni debt ETFs (+$294 million) and taxable bond ETFs (+$121 million) both took in relatively small amounts of net new money. For equity ETFs, the largest individual net outflows belonged to SPDR S&P 500 ETF (SPY, -$4.5 billion) and Consumer Staples Select Sector SPDR (XLP, -$679 million).
Equity Mutual Funds
Equity mutual funds recorded their tenth consecutive weekly net outflows this week (-$3.6 billion). Equity mutual funds have lost more than $45 billion in assets during this time frame. Domestic equity funds (-$3.0 billion) were responsible for most of the net negative flows while nondomestic equity funds also contributed $597 million to the total net outflows. The Multi-Cap Value Funds peer group (-$594 million) had the largest net outflows among domestic equity funds, while International Multi-Cap Value Funds (-$356 million) led the nondomestic equity fund groups.
Fixed Income Mutual Funds
Taxable bond funds (+$6.3 billion) extended their consecutive weekly net inflow streak to 15, while muni debt funds (+$1.3 billion) made it 16 weeks of inflows in a row. The Core Plus Bond Funds (+$4.2 billion) and the Ultra Short Obligation Funds (+$1.1 billion) peer groups paced the increases for taxable bond funds, while General Muni Debt Funds (+$1.4 billion) and High Yield Muni Debt Funds (+$268 million) had the largest net inflows among the tax-exempt peer groups.
Money Market Mutual Funds
Money market funds (+$4.3 billion) had positive net inflows for the week. The Institutional U.S. Government Money Market Funds (+$7.7 billion) and Institutional U.S. Treasury Money Market Funds (+$2.2 billion) were responsible for the lion’s share of the group’s net inflows, while U.S. Government Money Market Funds (-$3.4 billion) and Institutional Money Market Funds (-$2.4 billion) suffered significant net outflows.