September 11, 2020

Despite Market Meltdown, Flows into Long-Term Funds and ETFs Remain Positive

by Tom Roseen.

The high-flying tech and stay-at-home stocks took a beating during the Refintiv Lipper fund-flows week ended September 9, 2020. While the NASDAQ Composite did enter correction territory, declining 10.03% from its most recent market closing high on September 2, investors buying the dip helped the index recover some of those three-day losses in the last day of trading. For the fund-flows week, the index was down 7.59%. In contrast, the average equity fund (including ETFs) was down just 2.22% for the week, but Lipper’s Natural Resources Funds (-6.72%), Commodity Energy Funds (-6.60%), and Equity Leverage Funds (-5.33%) classifications experienced the largest declines in the equity funds universe.

However, the rapid declines in the market did not equate to massive outflows from long-term mutual fund and ETF assets during the week. For the week, equity funds (including ETFs) witnessed net outflows of just $1.9 billion, while taxable bond funds (+$6.5 billion) and tax-exempt bond funds (+$1.0 billion) attracted net new money.

As has been the case over the last several months, conventional equity mutual funds (ex-ETFs) did experience net redemptions for the week, handing back $7.8 billion, suffering net redemptions for the twentieth consecutive week. However, equity ETFs attracted a net $6.0 billion for the week, with SPDR S&P 500 ETF (SPY) attracting $7.4 billion and ProShares UltraPro QQQ ETF (TQQQ) taking in some $1.1 billion.

Find out more about Refinitiv Lipper, one of the global leaders in independent fund performance data.

Large-Cap Growth Funds (-$2.4 billion, including ETFs) handed back the largest net redemptions for the week of all the classifications housed in Lipper’s U.S. diversified equity funds macro-group, bettered slightly by Large-Cap Core Funds (-$1.4 billion). In the sector equity funds and ETFs space, Science & Technology Funds (-$855 million), Consumer Services Funds (-$751 million), and Health/Biotechnology Funds (-$695 million) experienced the largest net outflows of the macro-group. While in the world equity funds group, International Multi-Cap Growth Funds (-$705 million) and Global Equity Income Funds (-$434 million) handed back the largest net redemptions for the fund-flows week.

As might be expected given the slight flight away from risk-on plays, High Yield Funds (-$566 million) and Loan Participation Funds (-$260 million) suffered the second and third largest net redemptions for the week and bettered the net redemptions of General U.S. Treasury Funds, which handed back some $683 million for the week in the taxable bond fund universe. Nonetheless, the darlings in the taxable fixed income space of late—Core Bond Funds (+$2.2 billion, including ETFs), Core Plus Bond Funds (+$1.4 billion), and Short Investment-Grade Debt Funds (+$1.0 billion)—continued to attract net new money.

As mentioned earlier, municipal bond funds attracted just slightly more than $1.0 billion for the week, bring their net inflows streak to 18 consecutive weeks. General & Insured Municipal Debt Funds (+$354 million) and Short Municipal Debt Funds (+$311 million) were the primary attractors of investors’ money, while, in the same vein as their taxable counterparts, High Yield Municipal Debt Funds (-$88 million, including ETFs) witnessed the only major redemption for the fund-flows week, their third week of net outflows after a 14-week inflows run.

________________________________________________________________________________________________

Refinitiv Lipper delivers data on more than 330,000 collective investments in 113 countries. Find out more.

Get In Touch

Subscribe

We have updated our Privacy Statement. Before you continue, please read our new Privacy Statement and familiarize yourself with the terms.×