For the first month in nine, investors were net sellers of mutual fund assets, withdrawing $6.8 billion from the conventional funds business (excluding ETFs, which are reviewed in the section below) for January.
During the month, markets took a rollercoaster ride on news of increased Middle East tensions, weaker-than-expected economic data, better-than-expected Q4 earnings reports, signed trade deals, and the emergence of the deadly coronavirus. For the twelfth month in a row, stock & mixed-assets funds witnessed net outflows (-$45.3 billion) in January. Investors continued to look for yield and safe places to hide, pushing the fixed income funds macro-group to its thirteenth consecutive month of net inflows, injecting $62.0 billion for January. Money market funds (-$23.4 billion) witnessed net outflows for the first month in nine.
For the fifth month running, ETFs witnessed net inflows, taking in $55.7 billion for January. Authorized participants (APs—those investors who actually create and redeem ETF shares) were net purchasers of stock & mixed-assets ETFs—also for the fifth month in a row—injecting $37.7 billion into equity ETF coffers. And for the fifteenth straight month, they were net purchasers of bond ETFs—injecting $18.0 billion for January. APs were net purchasers of all five equity-based ETF macro-classifications, injecting net new money into USDE ETFs (+$18.8 billion), World Equity ETFs (+$10.4 billion), Sector Equity ETFs (+$7.9 billion), Alternatives ETFs (+$556 million), and Mixed-Assets ETFs (+$68 million).
In this report, I highlight the January fund-flows results for both types of investment vehicles.
Highlights
- For the first month in nine, mutual fund investors were net redeemers of fund assets, withdrawing $6.8 billion from the conventional funds business for January.
- For the thirteenth month in a row, fixed income funds (+$62.0 billion for January) witnessed net inflows, while money market funds (-$23.4 billion) witnessed net outflows for the first month in nine. For the twelfth consecutive month, investors were net redeemers of stock & mixed-assets funds (-$45.3 billion).
- For the fifth month in a row, authorized participants (APs) were net purchasers of ETFs, injecting $55.7 billion for January. APs were net purchasers of stock & mixed-assets ETFs (+$37.7 billion), while also being net purchasers of fixed income ETFs (+$18.0 billion).
- Over the past three months, APs injected more net new money into stock & mixed-assets ETFs (+$111.2 billion) than into fixed income ETFs (+$41.5 billion).
Click here to download the January 2020 FundFlows Insight Report: Fund Investors Remain Cautious While APs Embrace Stock and Bond ETFs in January.
