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June 6, 2024

U.S. Weekly FundFlows Insight Report: Money Market Funds Add $29.2 Billion During First Week of June

by Jack Fischer.

The data in the article below is sourced from Lipper’s Global Fund Flows application. GFF can be found on LSEG Workspace (“FundFlows”).

During LSEG Lipper’s fund-flows week that ended June 5, 2024, investors were overall net purchasers of fund assets (including both conventional funds and ETFs) for the sixth week in seven, adding a net $39.4 billion—the largest weekly inflow in nine weeks.

This past week, money market funds (+$29.2 billion), taxable bond funds (+$6.1 billion), equity funds (+$3.7 billion), tax-exempt bond funds (+$548 million), and commodities funds (+$521 million) each saw inflows.

Mixed-assets funds (-$389 million) and alternative investments (-$186 million) reported outflows.

Active equity funds (-$2.7 billion) suffered outflows while passively managed equity funds (+$6.3 billion) attracted new capital. Actively managed equity funds have seen 11 straight weeks of outflows.

Both active and passive fixed income funds observed an influx of capital over the past week, (+$3.8 billion and +$2.8 billion, respectively). Active fixed income funds realized their sixth straight weekly inflow.

In aggregate, spot bitcoin ETFs saw an inflow (+$1.2 billion) over the week, led by Fidelity Wise Origin Bitcoin Fund (FBTC) which logged its largest inflow (+$602 million) since the week ending March 13, 2024.

Index Performance

At the close of LSEG Lipper’s fund-flows week, U.S. broad-based equity indices reported gains— S&P 500 (+1.65%), Nasdaq (+1.58%), Russell 2000 (+1.36%), and DJIA (+0.95%). The Nasdaq has realized five straight weeks of positive returns.

Broad-based fixed income indices also saw nice returns— the FTSE U.S. Broad Investment Grade Bond Total Return Index (+2.05%), FTSE High Yield Market Total Return Index (+0.89%), and FTSE Municipal Tax-Exempt Investment Grade Bond Index (+0.92%) all finished the week in the black.

Overseas broad-based indices saw mostly plus-side returns—the DAX Total Return (+1.05%), FTSE 100 (+1.13%), Nikkei 225 (+0.58%), and S&P/TSX Composite (+1.07%) appreciated, while the Shanghai Composite (-1.43%) fell for the second straight week.

Rates/Yields

Both the two- (-5.05%) and 10-year (-7.22%) Treasury yield fell over the course of the week. Since the start of the year, both yields have risen (+11.15% and +10.73%, respectively).

According to Freddie Mac, the 30-year fixed-rate average (FRM) decreased for the fourth week in five, with the weekly average currently at 6.99%. Both the United States Dollar Index (DXY, -0.33%) and VIX (-13.06%) decreased over the course of the week.

The CME FedWatch Tool has the likelihood of the Federal Reserve leaving interest rates unchanged at 97.5%. This tool forecasted an 8.7% possibility of a 25-bps cut one month ago. The next meeting is scheduled for June 12, 2024.

Exchange-Traded Equity Funds

Exchange-traded equity funds recorded a $9.0 billion weekly inflow, the thirteenth in 15 weeks. The macro-group posted a 1.51% gain on the week, the first gain in three weeks.

Large-cap equity ETFs (+$6.5 billion), sector equity ETFs (+$1.1 billion), and equity income ETFs (+$661 million) were the top equity ETF groups to log inflows. Under large-cap ETFs, the S&P 500 Index Funds Lipper classification (+$5.2 billion) was the primary attractor of capital. Large-cap ETFs have seen seven consecutive weeks of net inflows.

World sector equity ETFs (-$164 million), small-cap ETFs (-$135 million), and developed international markets ETFs (-$47 million) suffered the only weekly outflows under equity ETFs. World sector equity ETFs tallied their eighth outflow in the last 10 weeks.

Over the past fund-flows week, the two top equity ETF flow attractors were SPDR S&P 500 ETF Trust (SPY, +$3.2 billion) and iShares Core S&P 500 ETF (IVV, +$1.5 billion).

Meanwhile, the two bottom equity ETFs in terms of weekly outflows were Invesco QQQ Trust Series 1 (QQQ, -$1.9 billion) and SPDR S&P 400 Mid Cap Growth ETF (MDYG, -$578 million).

Exchange-Traded Fixed Income Funds

Exchange-traded taxable fixed income funds observed a $1.9 billion weekly inflow—the macro group’s fourth weekly inflow in five. Fixed income ETFs reported a gain of 1.55% on average, marking the first gain in three weeks.

High yield ETFs (+$798 million), government & Treasury ETFs (+$692 million), and general domestic taxable fixed income ETFs (+$343 million) were the top subgroups under taxable bond ETFs to observe inflows. High yield ETFs have attracted inflows in four of the last five weeks while seeing their first week of plus-side performance in three.

Short/intermediate investment-grade ETFs (-$157 million) was the only subgroup to record an outflow on the week. This was the first outflow in three weeks and only the fourth over the past 20.

Municipal bond ETFs reported a $260 million inflow over the week, marking the first week of inflows in three. Municipal bond ETFs saw also realized their first weekly gain (+1.29%) in three weeks.

iShares iBoxx $High Yield Corporate Bond ETF (HYG, +$615 million) and iShares 0-3 Month Treasury Bond ETF (SGOV, +$438 million) attracted the largest amounts of weekly net new money under fixed income ETFs.

On the other hand, iShares iBoxx Investment Grade Corporate Bond ETF (LQD, -$200 million) and iShares Core US Aggregate Bond ETF (AGG, -$192 million) suffered the largest weekly outflows.

Conventional Equity Funds

Conventional equity funds (ex-ETFs) witnessed weekly outflows (-$5.4 billion) for the one-hundred-and-twenty-first straight week. Conventional equity funds posted a weekly return of positive 1.38%, the first week of gains in three.

Large-cap funds (-$1.3 billion), mid-cap funds (-$746 million), and developed international markets funds (-$720 million) were the top conventional equity fund subgroups to realize weekly outflows. Large-cap conventional mutual funds logged their twenty-fourth outflow over the past 25 weeks, led by the Large-Cap Growth classification (-$827 million).

No subgroup under conventional equity mutual funds saw an inflow over the trailing week.

Conventional Fixed Income Funds

Conventional taxable-fixed income funds realized a weekly inflow of $3.1 billion—marking the first inflow the last five weeks. The macro-group realized a gain of 1.37% on average—their first plus-side performance in three weeks.

Short/intermediate investment-grade funds (+$1.8 billion), general domestic taxable fixed income funds (+$750 million), and high yield funds (+$389 million) led taxable fixed income mutual fund subgroups in weekly net outflows. Short/intermediate investment-grade funds have seen their first inflow over the last five weeks.

Government & Treasury funds (-$60 million) was the only subgroup to observe outflows over the week.

Municipal bond conventional funds (ex-ETFs) returned a positive 0.90% over the fund-flows week, giving the subgroup its first gain in three weeks. Tax-exempt fixed income mutual funds experienced a $288 million inflow, marking the first inflow in four weeks.

*Lipper weekly fund flows period is from the prior Thursday through Wednesday.

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