Investors pushed U.S. stock indices to all-time highs in March. During the month investors cheered generally improved economic reports and data showing the nation’s jobless rate fell to the lowest level in four years; employers added some 236,000 new jobs in February—bringing the unemployment rate to 7.7%. And, despite some investors’ questioning the bailout plan for Cyprus banks (which included a controversial tax on bank deposits), the Dow Jones Industrial Average posted its longest winning streak—ten consecutive days of returns in the black—in 16 years, while posting eight consecutive record closing highs. However, despite a small increase in yields because of positive economic reports in the first half of the month that sent the benchmark ten-year yield to its intra-month closing high of 2.07% on March 11, the Treasury yield curve generally ended the month right where it started.
REUTERS/Beawiharta
For the ninth straight month mutual fund investors were net purchasers (barely) of fund assets in March, injecting an albeit-small $0.2 billion into the conventional funds business (excluding exchange-traded funds [ETFs]). They padded the coffers of stock & mixed-asset funds and bond funds (+$42.3 billion and +$15.5 billion, respectively), while being net redeemers of money market funds, (-$57.6 billion). For the third consecutive month the U.S. Diversified Equity Funds macro-group experienced net inflows (+$3.9 billion). However, large-cap funds (-$5.2 billion) witnessed their forty-sixth consecutive month of net redemptions.
Exchange-traded funds (ETFs) posted their sixteenth consecutive month of net inflows at $13.5 billion, with $9.0 billion in net sales for stock & mixed-asset offerings and bond ETFs reported net inflows of roughly $4.4 billion as new sales included both risk-on and risk-off positions. In contrast to their conventional equity fund cohorts, U.S. Diversified Equity (USDE) ETFs (+$9.8 billion net) was the focal point as investors allocated away from emerging markets and European exposure.
To read our complete February FundFlows Insight Report, please click here or watch our 2013 Q1 Preliminary U.S. Fund Flows Review WebEx Replay by clicking here.
