$10.7 BILLION FUND INFLOWS AMIDST POOR NEW HOME SALES REPORT

In a shortened week of trading because of the Good Friday holiday, the Dow Jones Industrial Average gained 0.5% (76.80 points) for the fund flows week ended Wednesday, April 23rd. A disappointing new-home-sales report was also released with new single-family-home sales falling 14.5% for March to a seasonally adjusted annual rate of 384,000, well short of the expected 450,000 target. It was believed that the harsh winter most of the country experienced had hampered this statistic in the preceding months, but bad weather was not a driving factor in March. A potential reason for this poor showing was sticker shock. New single-family-home prices were on the rebound, with median prices up 12.6% from a year ago, including an 11.2% increase for March—the largest one-month gain ever.

With this as a backdrop, the week’s trading activity resulted in $10.7 billion of net inflows for funds. Taxable bond funds (+$2.9 billion net) experienced their seventh straight week of positive flows. Taxable bond mutual funds contributed $2.1 billion to this increase, while taxable bond exchange-traded funds (ETFs) were responsible for $800 million. Lipper’s Short/Intermediate Investment-Grade Debt Funds classification was responsible for almost $500 million of the positive flows in the mutual fund space, while ETF investors were buying iShares Core Total US Bond Market ETF (AGG, +$238 million) and iShares 20+ Year Treasury Bond ETF (TLT, +$211 million).

Equity funds had net inflows of $2.6 billion for the week. Equity mutual funds accounted for the entirety of these positive flows, since they had net inflows of $3.1 billion, while equity ETFs saw $471 million leave their coffers. International and global funds were responsible for $2.1 billion of the net inflows to the mutual fund universe. ProShares UltraPro QQQ (QQQ, -$880 million) and iShares Russell 2000 ETF (IWM, -$842 million) experienced the largest individual net outflows in the equity ETF space.

Municipal bond funds had their third consecutive week of net inflows (+$244 million). Municipal bond mutual funds (+$226 million) accounted for the lion’s share of these positive net flows. Money market funds, with $4.9 billion of net inflows, broke a seven-week losing streak.

For more information on this week’s Lipper fund flows data, please refer to Lipper’s U.S. Fund Flows website or this video.