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September 19, 2018

Fund Investors and APs Embrace Fixed Income Funds and ETFs in August

by Tom Roseen.

Photo Source: REUTERS/Chris Wattie

For the second consecutive month investors were net purchasers of mutual fund assets, injecting $7.5 billion into the conventional funds business (excluding ETFs) for August. Also for the second month in a row, money market funds witnessed net inflows, taking in $28.6 billion for August. Despite Federal Reserve Chair Powell’s outlining the Fed’s plans to hike its key lending rate, for the sixth month running the fixed income funds macro-group also witnessed net inflows, taking in $11.7 billion for August. However, for the fourth consecutive month stock & mixed-asset funds witnessed net outflows (-$32.8 billion for August).

For the second month in a row ETFs in general witnessed net inflows, taking in $24.9 billion for August. Authorized participants (APs, those investors who actually create and redeem ETF shares) were net purchasers of stock & mixed-asset ETFs—adding $18.7 billion to the equity ETF coffers. And for the thirty-eighth consecutive month they were net purchasers of bond ETFs—injecting $6.2 billion for August. APs were net purchasers of four of the five equity-based ETF macro-classifications: USDE ETFs (+$15.0 billion), World Equity ETFs (+$3.7 billion), Alternatives ETFs (+$498 million), and Mixed-Asset ETFs (+$76 million), while for the first month in six they were net redeemers of Sector Equity ETFs (-$618 million). In this segment I highlight the August fund-flow results for both types of investment vehicles.

Highlights:

  • For the second month in a row mutual fund investors were net purchasers of fund assets, injecting $7.5 billion into the conventional funds business for August. However, the headline number was slightly misleading because stock & mixed-asset funds suffered net redemptions (-$32.8 billion).
  • For the second month in a row Lipper’s World Equity Funds macro-classification witnessed net outflows, handing back $1.9 billion for August.
  • For the second month running APs were net purchasers of ETFs, injecting $24.9 billion for August. APs were net purchasers of stock & mixed-asset ETFs (+$18.7 billion) and bond ETFs (+$6.2 billion).
  • For the first month in four World Equity ETFs (+$3.7 billion for August) attracted net new money.

Click here to download the August 2018 FundFlows Insight Report: Fund Investors and APs Embrace Fixed Income Funds and ETFs in August.

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Lipper delivers data on more than 265,000 collective investments in 61 countries. Find out more.

Photo Source: REUTERS/Chris Wattie

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