April 16, 2021

Investors Return to Equity Funds as Overall Fund Inflows Hit Highest Total in Over a Year

by Tom Roseen.

Investors were net purchasers of mutual fund assets for the fourth month in a row, injecting $181.2 billion into the conventional funds business (excluding ETFs, which are reviewed in the section below) for March (their largest monthly net inflows since March 31, 2020). Contributing to that record, for the first month in three, stock & mixed-assets funds experienced net inflows (+$11.2 billion) for March. Despite growing inflationary concerns and a steepening Treasury yield curve, investors continued to pad the coffers of fixed income instruments, pushing the fixed income funds macro-group to its eleventh consecutive month of net inflows, attracting $41.2 billion for March. Money market funds (+$128.8 billion) witnessed net inflows for the second consecutive month.

For the nineteenth straight month, ETFs witnessed net inflows, taking in $87.8 billion for March. Authorized participants (APs—those investors who actually create and redeem ETF shares) were net purchasers of stock & mixed-assets ETFs for the tenth consecutive month, injecting $73.6 billion into equity ETF coffers. And for the twelfth month in a row, they were net purchasers of bond ETFs—injecting $14.2 billion for the month. APs were net purchasers of four of the five equity-based ETF macro-classifications, padding the coffers of U.S. Diversified Equity ETFs (+$46.1 billion), World Equity ETFs (+$18.3 billion), Sector Equity ETFs (+$9.4 billion), and Mixed-Assets ETFs (+$28 million), while being net redeemers of Alternatives ETFs (-$210 million). Over the last three months, Stock & Mixed-Assets ETFs took in $193.9 billion and Bond ETFs attracted $42.0 billion of net new money.

In this report, I highlight the March 2021 fund-flows results and trends for both ETFs and conventional mutual funds.

Highlights:

  • For the fourth consecutive month, mutual fund investors were net purchasers of fund assets, injecting $181.2 billion into the conventional funds business for March.
  • Fixed income funds (+$41.2 billion) witnessed net inflows for the eleventh month in a row, while money market funds (+$128.8 billion) experienced net inflows for the second month in a row.
  • For the first month three, investors were net purchasers of stock & mixed-assets funds (+$11.2 billion).
  • APs were net purchasers of ETFs, injecting $87.8 billion for March, for the nineteenth month of consecutive inflows.
  • And, for the twelfth month in a row, fixed income ETFs (+$14.2 billion for March) attracted net new money, while investors padded the coffers of stock & mixed-assets ETFs (+$73.6 billion), their tenth straight month of net inflows.
  • For the first month in three, multi-cap ETFs (+$14.8 billion) experienced the largest net inflows of the four capitalization groups.

Click here to download the March 2021 FundFlows Insight Report: Investors Return to Equity Funds as Overall Fund Inflows Hit Highest Total in Over a Year.

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