by Pat Keon, CFA.
Lipper’s fund asset groups (including both mutual funds and exchange-traded funds) had net positive flows of $10.0 billion for the fund-flows trading week ended Wednesday, July 3. Money market funds (+$26.6 billion) drove the weekly net inflows, while taxable bond funds (+$2.0 billion) and municipal debt funds (+$1.2 billion) also contributed to the total net inflows. Equity funds were the only asset group to suffer net outflows for the week, as they saw $19.8 billion leave their coffers.
The ETF universe had net outflows of $9.8 billion last week, as equity ETFs (+$9.9 billion) were responsible for all of the net negative flows. The lion’s share of the net outflows for equity products came from iShares Core S&P 500 (IVV, -$6.7 billion), Invesco QQQ Trust (QQQ, -$2.7 billion), and SPDR S&P 500 ETF (SPY, -$1.6 billion). Muni debt (+$103 million) and taxable bond ETFs (+$16 million) both took in relatively small amounts of net new money for the week.
Equity Mutual Funds
Equity mutual funds (-$9.8 billion) experienced their twentieth straight week of net negative flows. Both domestic equity funds (-$6.4 billion) and nondomestic equity funds (-$3.4 billion) were hit hard by the net outflows. For the year to date, equity funds have experienced net outflows of more than $79 billion, with more than 80% of that total attributable to domestic equity funds (-$66.5 billion). If this course continues in the second half of the year, domestic equity funds will suffer their sixth consecutive annual net outflow, and their thirteenth in the last 14 years.
Fixed Income Mutual Funds
Both taxable bond funds (+$2.0 billion) and municipal debt funds (+$1.1 billion) had positive net flows for the week. It was the twenty-sixth straight week of net inflows for muni debt funds and the third for taxable bond funds. The largest net inflows on the taxable bond fund side of the ledger belonged to the Core Bond Funds (+$925 million) and Core Plus Bond Funds (+$919 million) peer groups. For muni debt funds, High Yield Muni Debt Funds (+$293 million) and Intermediate Muni Debt Funds (+$270 million) drove the net inflows.
Money Market Mutual Funds
Money market funds (+$26.6 billion) took in net new money for the second consecutive week. All of the money market peer groups experienced net positive flows last week, led by U.S. Government Money Market Funds (+$6.6 billion), Institutional U.S. Government Money Market Funds (+$6.0 billion), and Institutional U.S. Treasury Money Market Funds (+$5.8 billion).