For the Lipper Refinitiv fund-flows week ended December 2, 2020, investors injected some $8.7 billion into U.S. mutual funds and ETFs. While COVID-19 vaccine news pushed ETF investors in the direction of more out-of-favor securities, the rise in coronavirus cases and hospitalizations kept many mutual fund investors in a risk-off mode.
For the fund-flows week, fund investors (ex-ETFs) were net redeemers of conventional equity funds, withdrawing $2.7 billion. As has been the long-term trend, large-cap funds witnessed the largest net redemptions (-$1.5 billion), bettered by international equity funds (-$574 million) and sector real estate funds (-$327 million).
On the fixed income side, conventional fund investors padded the coffers of taxable bond funds (+$4.9 billion), with corporate investment-grade bond funds (+$4.3 billion) attracting the lion’s share of net new money, followed by flexible funds (+$430 million) and international & global debt funds (+$289 million).
However, ETF investors appeared to be more risk-seeking, injecting a net $9.9 billion into equity ETFs during the week, with large-cap funds taking in $3.2 billion as some investors appeared to regain interest in some of the COVID-related “stay-at-home” stocks.
Meanwhile, others still appeared to focus on some of the out-of-favor issues, injecting net new money into international ETFs (+$1.8 billion), sector technology ETFs (+$1.7 billion), small-cap ETFs (+$1.5 billion), sector healthcare/biotech ETFs (+$960 million), and sector energy ETFs (+$453 million). A COVID-vaccine related rally in oil prices in November was a boon for energy and natural resources funds, which continued through to the first few days of December.
ETF investors were less sanguine when it came to taxable fixed income ETFs, withdrawing a net $792 million for the fund-flows week as Treasuries sold off at the long end of the curve and yields rose. While ETF investors continued to be net purchasers of corporate high-yield ETFs (+$513 million) and flexible funds (+$307 million), taking their collective foot off the pedal, they were net redeemers of corporate high-yield ETFs, withdrawing $1.1 billion for the week, and government Treasury ETFs (-$300 million).
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