Global markets were reassured this week when Federal Reserve Chairman Ben Bernanke signaled that the Fed’s bond-buying program would continue, saying that a “highly accommodative policy is needed for the foreseeable future.” Recently-released minutes from the latest Federal Reserve policymakers’ meeting showed about half the members felt the bond-buying stimulus could wind down by year-end, the other half wanted reassurance that the job market is on solid ground before changing policy.
In response, equity exchange-traded fund (ETF) investors pumped $8.4 billion net into their accounts for the week ended Wednesday, July 10, the highest amount since the early-January burst. Naturally, SPDR S&P 500 ETF (SPY) collected the lion’s share, about $5.5 billion net.
ETF investors drew away from SPDR Gold (GLD) to the tune of $1.0 billion in net outflows. Equity mutual fund investors also continued to feel bullish; their $3.5 billion net inflow harkened back to the Q1 2013 euphoria. Lipper’s Emerging Markets Funds classification, with $392 million in net proceeds, was the top draw for mutual fund owners.
However, taxable bond fund investors were of two minds: mutual fund users scraped up about $219 million in net inflows for their accounts, while bond ETF investors pulled out about $456 million net—neither amount reflected a strong opinion on bonds. Municipal bond mutual funds saw their outflow problem accelerate as $1.1 billion was pulled from them during the week, and the ETF side also felt the sting when $116 million was taken from them. Money market funds saw inflows of $22.9 billion net; institutional investors pumped $23.7 billion into the system, while retail MMF owners made modest net withdrawals.
For more information on this week’s fund flows data, please refer to Lipper’s database or watch the following video: