by Pat Keon, CFA.
Lipper’s fund asset groups (including both mutual funds and ETFs) had net positive flows of $32.3 billion for the fund-flows trading week ended Wednesday, May 22. This represents the fifth consecutive week funds took in net new money. Money market funds (+$28.4 billion) took in the most net new money for the fourth straight week, while equity funds (+$2.7 billion) and municipal bond funds (+$1.5 billion) also contributed to the total net inflows. Taxable bond funds experienced net outflows of $236 million last week.
The equity markets were mixed last week as the Dow Jones Industrial Average and S&P 500 Index recorded gains of 0.50% and 0.19%, respectively, while the NASDAQ Composite Index retreated 0.91%. Market sentiment was again dominated by the U.S./China trade war, as the news of the day in relation to trade tensions (both positive and negative) drove the direction of the markets. The technology-laden NASDAQ Composite was more sensitive to these changes than the other indices as it had percentage changes of greater than 1% in its value (two negative and one positive) in three of the five trading days.
The ETF universe had net inflows of $5.3 billion last week as all three asset groups took in net new money. Equity ETFs (+$5.0 billion) were responsible for the lion’s share of the net inflows, while taxable bond and muni bond ETFs accounted for $226 million and $79 million, respectively, of the total net inflows. The largest individual net inflows among equity ETFs belonged to SPDR S&P 500 ETF (SPY, +$2.1 billion) and iShares Core S&P 500 ETF (IVV, +$892 million)
Equity Mutual Funds
Equity mutual funds (-$2.3 billion) experienced their fourteenth straight week of net outflows. As usual, domestic equity funds (-$2.2 billion) dominated the net outflows, while nondomestic equity funds were responsible for $43 million of the total. At the peer group level, Small-Cap Core Funds (-$512 million) and International Multi-Cap Core Funds (-$193 million) accounted for the largest net outflows among the domestic and nondomestic groups.
Fixed Income Mutual Funds
Municipal bond funds (+$1.4 billion) pushed their weekly consecutive net inflows streak to 20, while taxable bond funds suffered their second consecutive net outflows (-$462 million) after 17 straight net inflows. For muni bond funds, the national muni peer groups were responsible for the lion’s share of the net inflows, paced by the High Yield Muni Debt Funds (+$553 million) and Intermediate Muni Debt Funds (+$358 million) peer groups. For taxable bond funds, the Loan Participation Funds (-$481 million) group had the largest net outflow.
Money Market Mutual Funds
Money market funds (+$28.4 billion) experienced their fifth straight weekly net inflows. All of the money market fund peer groups took in net new money for the week, paced by Institutional U.S. Government Money Market Funds (+$14.1 billion) and Institutional U.S. Treasury Money Market Funds (+$11.2 billion).