July 19, 2021

Investors Embrace Bond Funds and ETFs in June

by Tom Roseen.

Investors were net redeemers of mutual fund assets for the first month in seven, withdrawing $51.8 billion from the conventional funds business (excluding ETFs, which are reviewed in the section below) for June. For the third month in a row, stock & mixed-assets funds experienced net outflows (-$39.4 billion). The Treasury yield curve continued to flatten during the month, pushing the fixed income funds macro-group to its fourteenth consecutive month of net inflows, attracting $64.5 billion for June. Money market funds (+$77.0 billion) witnessed net outflows for the first month in five. Over the last six months, stock & mixed-assets funds handed back $155.7 billion, while bond and money market funds attracted $324.2 billion and $197.5 billion, respectively, of net new money.

For the twenty-second straight month, ETFs witnessed net inflows, taking in $73.3 billion for June. Authorized participants (APs—those investors who actually create and redeem ETF shares) were net purchasers of stock & mixed-assets ETFs for the thirteenth consecutive month, injecting $54.6 billion into equity ETF coffers. And for the fifteenth month in a row, they were net purchasers of bond ETFs—injecting $18.6 billion for the month. APs were net purchasers of all five equity-based ETF macro-classifications, padding the coffers of U.S. Diversified Equity ETFs (+$31.2 billion), World Equity ETFs (+$13.9 billion), Sector Equity ETFs (+$7.8 billion), Alternatives ETFs (+$1.1 billion), and Mixed-Assets ETFs (+$679 million). Over the last six months, stock & mixed-assets ETFs took in $348.8 billion and bond ETFs attracted $107.8 billion of net new money.

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

Highlights:

  • For the first month in seven, mutual fund investors were net sellers of fund assets, removing $51.8 billion from conventional funds for June.
  • Fixed income funds (+$54.6 billion for June) witnessed net inflows for the fourteenth month in a row, while money market funds (-$77.0 billion) experienced net outflows for the first month in five.
  • For the third straight month, investors were net sellers of stock & mixed-assets funds (-$39.4 billion).
  • APs were net purchasers of ETFs, injecting $73.3 billion for June, for their twenty-second month of consecutive inflows.
  • And, for the fifteenth month in a row, fixed income ETFs (+$18.6 billion for June) attracted net new money, while investors padded the coffers of stock & mixed-assets ETFs (+$54.6 billion), their thirteenth straight month of net inflows.
  • For the first month in seven, large-cap ETFs (+$10.9 billion) experienced the largest net inflows of the four capitalization groups.

Click here to download the June 2021 FundFlows Insight Report: Investors Embrace Bond Funds and ETFs in June.

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