by Pat Keon, CFA.
Lipper’s fund asset groups (including both mutual funds and exchange-traded funds) took in $32.7 billion in net new money for the fund-flows trading week ended Wednesday, September 11. This total represents the fourth highest weekly net inflow for the year to date. Each asset group recorded a positive net inflow for the week, led by money market funds (+$17.6 billion), while taxable bond funds (+$7.4 billion), equity funds (+$6.8 billion), and municipal bond funds (+$930 million) all recorded solid results.
The equity markets posted strong gains for the fund-flows trading week on renewed hopes for a resolution to the U.S./China trade war. The Dow Jones Industrial Average, NASDAQ Composite Index, and the S&P 500 Index were up 2.97%, 2.42%, and 2.15%, respectively, for the week. Good news in respect to the trade tensions bookended the flows trading week. The week started with both sides confirming that there would be another round of talks in the early part of October and closed with China announcing that they would exempt some types of U.S. products from the existing tariffs. The aforementioned equity markets captured the lion’s share of their gains for the week on these two trading days.
ETFs (+$17.5 billion) took in net new money for the fourth week in five, paced by equity ETFs (+$13.4 billion). Among this asset group, the largest individual net inflows belonged to SPDR S&P 500 ETF (SPY, +$7.7 billion) and iShares Russell 2000 ETF (IWM, +$3.0 billion). Taxable bond ETFs (+$4.1 billion) also put up a significant positive net flow number, while muni bond ETFs contributed $51 million to the total. The largest individual net inflows for taxable bond ETFs were attributable to iShares Floating Rate Bond ETF (FLOT, +$673 million) and SPDR Bloomberg Barclays High Yield Bond ETF (JNK, +$587 million).
Equity Mutual Funds
Equity mutual funds (-$6.6 billion) experienced net outflows for the thirtieth consecutive week. Both domestic equity funds (-$4.0 billion) and nondomestic equity funds (-$2.6 billion) contributed significantly to this week’s net negative flows. The largest net outflows among the regional equity peer groups belonged to Global Equity Income Funds (-$983 million) and Large-Cap Core Funds (-$870 million).
Fixed Income Mutual Funds
Municipal debt funds (+$879 million) extended their streak of consecutive net inflows to 36, while taxable bond funds (+$3.3 billion) took in net new money for the twelfth week in 13. The Ultra-Short Obligation Funds (+$1.3 billion) and High Yield Funds (+$863 million) peer groups paced the net inflows on the taxable bond fund side of things, while General Muni Debt Funds (+$279 million) and High Yield Muni Debt Funds (+$265 million) led the tax-exempt peer groups.
Money Market Mutual Funds
Money market funds took in $17.6 billion in net new money this week, the highest weekly increase among the asset groups. All of the peer groups within the asset group experienced net inflows for the week, led by Institutional U.S. Government Money Market Funds (+$6.2 billion) and Institutional U.S. Treasury Money Market Funds (+$3.4 billion).