Investors returned to equity mutual funds during the week ended June 19, adding a combined $4.7 billion to their accounts — the first positive inflow in three weeks. However, that was before volatility hit the markets when Fed Chairman Ben Bernanke said the central bank will begin cutting the pace of asset purchases later this year, provided the U.S. economy continues to improve.
In a twist on recent behavior, there was no split in the week ended June 19 between mutual fund and exchange-traded fund (ETF) investors; the former added $1.5 billion, while equity ETF investors forked over $3.2 billion, especially to popular names such as SPY (+$2.4 billion) and Consumer Staples SPDR (XLP, +$535 million).
Among mutual funds, such Lipper categories as Large-Cap Growth Funds (-$340 million) and International Multi-Cap Growth Funds (-$263 million) were on the losing end.
Combined ETF and mutual fund outflows from taxable bond funds were just over half a billion dollars for the week. High-yield funds could not stanch their bleeding as investors removed a net $333 million from that area. The junk bond market was reeling from three weeks of miserable performance until those funds racked up a positive (+0.33%) performance for this past week.
Loan participation mutual fund strategies remained front and center, attracting a net $1.4 billion for the week. Municipal debt funds had outflows of $2.2 billion, their eighth largest weekly outflows on record. Money market mutual funds suffered $22.2 billion in outflows (about 1% of the industry assets) as institutions withdrew a net $26.1 billion while retail investors added about $4 billion to their cash accounts.
For more information on this week’s fund flows data, please see this visit Lipper’s fund flows site or watch the following video.