by Jeff Tjornehoj.
For the fund-flows week ended November 11, the benchmark Dow Jones Industrial Average lost 165 points to settle at 17,702. Equity mutual fund investors made net redemptions of $1.7 billion for the week (of which $765 million was from large-cap funds), while equity exchange-traded funds (ETFs) saw net inflows of $643 million; investors backed out of SPDR S&P 500 (SPY, -$1.5 billion) and made modest contributions to iShares Russell 2000 (IWM, +$1.6 billion) and iShares Core MSCI EAFE (EFA, +$1.3 billion).
A sour market in bonds (a decline of 0.64% for the week) may have led bond mutual fund investors to redeem shares. Overall, taxable bond mutual funds saw net outflows of $875 million for the week, which was the first outflow after four previous weeks of inflow activity. With no end in sight to the asset bleeding, Lipper’s Loan Participation Funds classification (-$213 million) marked 16 weeks of outflows by retail investors. Like their equity counterparts, High Yield Funds suffered outflows (-$543 million) among mutual fund investors, but unlike equities also saw net outflows on the ETF side (-$1.3 billion). Overall, bond ETFs saw $2.8 billion of net outflows. The week’s biggest bond ETF net outflows belonged to SPDR Barclays High Yield (JNK, -$1.2 billion), while iShares Core US Aggregate Bond (AGG, +1.3 billion) led the net-inflows list.
Municipal bond mutual fund investors added $229 million net to their accounts, and those funds now have had inflows for six straight weeks—for their best showing since March. Money market funds saw net inflows of $6.5 billion, of which institutional investors added $11.3 billion and retail investors cashed out $4.8 billion.