June 16, 2021

Investors Focus on Inflation Protected Bond and Commodity General Funds, ETFs in May

by Tom Roseen.

Investors were net purchasers of mutual fund assets for the sixth month in a row, injecting $89.9 billion into the conventional funds business (excluding ETFs, which are reviewed in the section below) for May. For the second month in a row, stock & mixed-assets funds experienced net outflows (-$12.7 billion). The Treasury yield curve continued to flatten during the month, pushing the fixed income funds macro-group to its thirteenth consecutive month of net inflows, attracting $21.5 billion for May. Money market funds (+$81.1 billion) witnessed net inflows for the fourth consecutive month. Over the last five months, stock & mixed-assets funds handed back $116.3 billion, while bond and money market funds attracted $259.6 billion and $274.5 billion, respectively, of net new money.

For the twenty-first straight month, ETFs witnessed net inflows, taking in $66.4 billion for May. Authorized participants (APs—those investors who actually create and redeem ETF shares) were net purchasers of stock & mixed-assets ETFs for the twelfth consecutive month, injecting $47.5 billion into equity ETF coffers. And for the fourteenth month in a row, they were net purchasers of bond ETFs—injecting $18.9 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 (+$20.1 billion), World Equity ETFs (+$17.6 billion), Sector Equity ETFs (+$9.1 billion), and Alternatives ETFs (+$1.1 billion), while being net redeemers of Mixed-Assets ETFs (-$369 million). Over the last five months, stock & mixed-assets ETFs took in $294.2 billion and bond ETFs attracted $89.2 billion of net new money.

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

Highlights:

  • For the sixth consecutive month, mutual fund investors were net purchasers of fund assets, injecting $89.9 billion into conventional funds for May.
  • Fixed income funds (+$21.5 billion for May) witnessed net inflows for the thirteenth month in a row, while money market funds (+$81.1 billion) experienced net inflows for the fourth straight month.
  • For the second straight month, investors were net sellers of stock & mixed-assets funds (-$12.7 billion).
  • APs were net purchasers of ETFs, injecting $66.4 billion for May, for their twenty-first month of consecutive inflows.
  • And, for the fourteenth month in a row, fixed income ETFs (+$18.9 billion for May) attracted net new money, while investors padded the coffers of stock & mixed-assets ETFs (+$47.5 billion), their twelfth straight month of net inflows.
  • For the third month running, multi-cap ETFs (+$7.7 billion) experienced the largest net inflows of the four capitalization groups.

Click here to download the May 2021 FundFlows Insight Report: Investors Focus on Inflation Protected Bond and Commodity General Funds, ETFs in May.

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