Volatile Week sees $18.3 Billion Pumped into Funds

For the fund-flows week ended Wednesday, September 24, the Dow Jones Industrial Average managed a small increase during a volatile week of trading. In a week in which there were four trading days of triple-digit moves, the Dow gained 53.21 points overall (+0.32%) to close at 17,210.06.

Strong economic news opening and closing the week drove the index to its positive performance. To start the week the market took strength from the Federal Reserve’s statement released after the Fed’s two-day meeting. The Fed reiterated that it is committed to low interest rates long after the quantitative-easing program comes to an end in October. The Dow closed the week with its best one-day percentage gain in five weeks (+0.90%). On the last day of the week the Commerce Department released better-than-anticipated new-home-sales data that showed an 18% spike in August to a seasonally adjusted annual rate of 504,000—the data’s highest level in more than six years.

Turning our attention to the week’s fund-flows activity, all four of Lipper’s fund macro-groups had net inflows, resulting in total overall positive net flows of $18.3 billion. Money market funds accounted for the largest chunk (+$9.5 billion), followed by equity funds (+$5.6 billion), taxable bond funds (+$2.6 billion), and municipal bond funds (+$589 million).

The positive results from money market funds marked their sixth positive weekly net flows in the last eight weeks. Institutional taxable money market funds accounted for all of the increase with net inflows of $13.2 billion.

Taxable bond mutual funds (+$2.7 billion) accounted for all the net inflows into the taxable bond fund group as taxable bond exchange-traded funds (ETFs) lost $129 million. As in recent weeks investors put money into investment-grade debt mutual funds (+$546 million), but the group with the largest net inflows was general bond funds at $989 million. On the ETF side, ProShares Ultra 7-10 Year Treasury (UST, -$275 million) paced the individual fund outflows, while iShares iBoxx $ High Yield Corporate Bond ETF (HYG, +$598 million) had the largest net increase.

Equity ETFs took in over $6.5 billion for the week, while equity mutual funds saw $938 million leave their coffers. SPDR S&P 500 ETF Trust (SPY, +$6.1 billion) had the largest individual net inflow among the ETFS, followed by iShares Core S&P 500 ETF (IVV, +$1.1 billion) and iShares Russell 2000 ETF (IWM, +$1.1 billion). In a change on the mutual funds side money left the nondomestic equity mutual fund group (-$100 million) as well as the domestic group (-$838 million).

Lastly, municipal bond mutual funds continued their slow but steady pace with net inflows of $469 million—for the group’s seventh consecutive week of positive flows. As usual, funds in the national muni debt classifications (+$480 million) accounted for all of the increase in the municipal bond mutual funds group.

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