LIPPER FUND FLOWS: SOFT ECONOMIC NEWS PROMPTS $8.6 BILLION PUMPED INTO ETF ACCOUNTS

A barrage of soft economic news this past week sent stocks and bonds to higher levels as the Dow set a record high at 15,680 on Tuesday before falling slightly on profit-taking to end the flows week at 15,618 on Wednesday; the ten-year Treasury touched 2.50% on strong buying as well. Weak data on the economy raised hopes that the Fed would continue its bond-buying program past December (at least). The stimulative effect it has on stock prices encouraged equity mutual funds investors to follow suit: they added $3.1 billion this week in net new money for the week ended October 30, 2013.  

Exchange-traded fund (ETF) investors were even more impressed with that line of thinking as they added $8.6 billion to their accounts. Equity ETF investors were big buyers of SPDR S&P 500 (SPY, +$1.3 billion) though they soured on SPDR Gold (GLD), which had outflows of $275 million. Top draws this week for mutual funds investors were International Multi-Cap Core Funds (+$587 million) and Emerging Markets Funds (+$457 million).

Taxable bond mutual fund investors followed up last week’s $1.8 billion net purchase with another $1.2 billion this week. High Yield Funds had somewhat soft inflows of $249 million while Loan Participation Funds had inflows of $519 million. Bond ETF investors favored iShares iBoxx $HY Corp (HYG, +$187 million) and iShares Floating Rate Bond (FLOT, +$162 million). Municipal bond funds investors were net redeemers of $581 million, the lowest net outflows in over a month. Money Market Funds had inflows of $7.7 billion this week.

For more information on this week’s Lipper fund flows data, please watch this video.