Fund Investors Remain Risk Averse, While APs Put the Pedal to the Metal in November

For the seventh month in a row, investors were net purchasers of mutual fund assets, injecting $37.4 billion into the conventional funds business (excluding ETFs, which are reviewed in the section below) for November. However, the headline number was once again misleading.

During the month, investors continued to cheer better-than-expected Q3 earnings reports but kept a keen eye on the China and U.S. trade negotiations. Nevertheless, for the tenth month in a row, stock & mixed-assets funds (ex-ETFs) witnessed net outflows (-$37.1 billion) for November. Investors continued to look for yield and safe places to hide, pushing the fixed income funds macro-group to its eleventh consecutive month of net inflows, injecting $33.6 billion for November. Money market funds (+$40.8 billion) witnessed net inflows for the seventh month running.

For the third month running, ETFs witnessed net inflows, taking in $44.6 billion for November. 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 a row—injecting $34.7 billion into equity ETF coffers. And for the thirteenth straight month, they were net purchasers of bond ETFs—injecting $10.0 billion for November. APs were net purchasers of all five of the equity-based ETF macro-classifications, injecting net new money into USDE ETFs (+$14.5 billion), World Equity ETFs (+$12.8 billion), Sector Equity ETFs (+$6.5 billion), Alternative ETFs (+$685 million), and Mixed-Assets ETFs (+$112 million).

In this report, I highlight the November fund-flows results for both types of investment vehicles.

Highlights

• For the seventh consecutive month, mutual fund investors were net purchasers of fund assets, injecting $37.4 billion into the conventional funds business for November.
• For the eleventh month in a row, fixed income funds (+$33.6 billion for November) witnessed net inflows, while for the tenth consecutive month, investors were net redeemers of stock & mixed-assets funds (-$37.1 billion). Money market funds (+$40.8 billion) witnessed net inflows for the seventh straight month.
• For the third month in a row, APs were net purchasers of ETFs, injecting $44.6 billion for November. APs were net purchasers of stock & mixed-assets ETFs (+$34.7 billion), while also being net purchasers of fixed income ETFs (+$10.0 billion).
• Year to date, APs injected more net new money into bond ETFs (+$138.1 billion) than into stock & mixed-assets ETFs (+$128.3 billion).