APs Remain Risk Seeking While Fund Investors Apply the Brakes in October

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).

Highlights

• For the sixth consecutive month, mutual fund investors were net purchasers of fund assets, injecting $56.9 billion into the conventional funds business for October.
• For the tenth month in a row, fixed income funds (+$30.0 billion for October) witnessed net inflows, while for the ninth consecutive month, investors were net redeemers of stock & mixed-assets funds (-$45.9 billion). Money market funds (+$72.9 billion) witnessed net inflows for the sixth straight month.
• For the second month in a row, authorized participants (APs) were net purchasers of ETFs, injecting $30.4 billion for October. APs were net purchasers of stock & mixed-assets ETFs (+$14.2 billion), while also being net purchasers of fixed income ETFs (+$16.2 billion).
• Year to date, APs injected more net new money into bond ETFs (+$128.1 billion) than into stock & mixed-assets ETFs (+$93.6 billion).