by Tom Roseen.
For the sixth month in a row, investors were net purchasers of mutual fund assets, injecting $56.9 billion into the conventional funds business (excluding ETFs, which are reviewed in the section below) for October. However, the headline number was once again misleading. During the month, investors took a risk-on stance in hopes of a trade truce between China and the U.S., upbeat Q3 earnings reports, and expectations of another Federal Reserve interest rate cut. Nevertheless, for the ninth month in a row, stock & mixed-assets funds witnessed net outflows (-$45.9 billion) for October. Investors looking for yield or just a safe place to hide pushed the fixed income funds macro-group to its tenth consecutive month of net inflows, injecting $30.0 billion for October. Money market funds (+$72.9 billion) witnessed net inflows for the sixth month running.
For the second month running, ETFs witnessed net inflows, taking in $30.4 billion for October. Authorized participants (APs—those investors who actually create and redeem ETF shares) were net purchasers of stock & mixed-assets ETFs—also for the second month in a row—injecting $14.2 billion into equity ETF coffers. And for the twelfth straight month, they were net purchasers of bond ETFs—injecting $16.2 billion for October. APs were net purchasers of all five of the equity-based ETF macro-classifications, injecting net new money into USDE ETFs (+$7.8 billion), World Equity ETFs (+$5.8 billion), Alternative ETFs (+$313 million), Sector Equity ETFs (+$176 million), and Mixed-Assets ETFs (+$154 million).
Click here to download the October 2019 FundFlows Insight Report: APs Remain Risk Seeking While Fund Investors Apply the Brakes in October.