October 16, 2019

APs Put Risk On While Fund Investors Remain Risk Averse in September

by Tom Roseen.

For the fifth month in a row, investors were net purchasers of mutual fund assets, injecting $57.1 billion into the conventional funds business (excluding ETFs, which are reviewed in the section below) for September. However, the headline number was once again misleading. While investors pushed the broad-based indices higher, fund investors remained risk averse as geopolitical and trade concerns, an impeachment inquiry, and mixed economic news left them on the sidelines. For the eighth month in a row, stock & mixed-assets funds witnessed net outflows (-$36.5 billion) for September. Investors looking for yield, or just a safe place to hide, pushed the fixed income funds macro-group to its ninth consecutive month of net inflows, injecting $24.8 billion for September. Money market funds (+$68.8 billion) witnessed net inflows for the fifth month running.

For the third month in four, ETFs witnessed net inflows, taking in $47.1 billion for September. Authorized participants (APs—those investors who actually create and redeem ETF shares) were net purchasers of stock & mixed-assets ETFs—also for the third month in four—injecting $32.6 billion into equity ETF coffers. And for the eleventh straight month, they were net purchasers of bond ETFs—injecting $14.5 billion for September. APs were net purchasers of all five of the equity-based ETF macro-classifications, injecting net new money into USDE ETFs (+$25.8 billion), Sector Equity ETFs (+$5.9 billion), World Equity ETFs (+$404 million), Alternatives ETFs (+$302 million), and Mixed-Assets ETFs (+$246 million). In this report, I highlight the September fund-flows results for both types of investment vehicles.

Highlights:

  • For the fifth consecutive month, mutual fund investors were net purchasers of fund assets, injecting $57.1 billion into the conventional funds business for September.
  • For the ninth month in a row, fixed income funds (+$24.8 billion for September) witnessed net inflows, while for the eighth consecutive month, investors were net redeemers of stock & mixed-assets funds (-$36.5 billion). Money market funds (+$68.8 billion) witnessed net inflows for the fifth straight month.
  • For the third month in four, authorized participants (APs) were net purchasers of ETFs, injecting $47.1 billion for September. APs were net purchasers of stock & mixed-assets ETFs (+$32.6 billion), while also being net purchasers of fixed income ETFs (+$14.5 billion).
  • Year to date, APs injected more net new money into bond ETFs (+$111.9 billion) than into stock & mixed-assets ETFs (+$79.4 billion).

Click here to download the September 2019 FundFlows Insight Report: APs Put Risk On While Fund Investors Remain Risk Averse in September.

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