November 17, 2021

Investors Embrace Inflation Protected Bond ETFs in October

by Tom Roseen.

Investors were net purchasers of mutual fund assets for the third month in a row, but they injected only $317 million into the conventional fund business (excluding ETFs, which are reviewed in the section below) for October. For the seventh month running, stock & mixed-assets funds experienced net outflows (-$28.0 billion). Despite the Treasury yield curve flattening for the month, the fixed income funds macro-group took in net new money for the eighteenth consecutive month, taking in $15.4 billion for October. Money market funds (+$12.9 billion) attracted net new money for the third straight month. Over the last 10 months, conventional stock & mixed-assets funds handed back $244.9 billion, while bond and money market funds attracted $434.5 billion and $213.1 billion, respectively, of net new money.

For the twenty-sixth straight month, ETFs witnessed net inflows, taking in $77.4 billion for October. Authorized participants (APs—those investors who actually create and redeem ETF shares) were net purchasers of stock & mixed-assets ETFs for the seventeenth consecutive month, injecting $62.1 billion into equity ETF coffers. And for the nineteenth month in a row, they were net purchasers of bond ETFs—injecting $15.3 billion for the month. Once again, APs were net purchasers of all five equity-based ETF macro-classifications, padding the coffers of U.S. Diversified Equity ETFs (+$45.2 billion), Sector Equity ETFs (+$8.1 billion), World Equity ETFs (+$7.4 billion), Alternatives ETFs (+$978 million), and Mixed-Assets ETFs (+$447 million). Over the last 10 months, stock & mixed-assets ETFs took in $532.6 billion and bond ETFs attracted $176.1 billion of net new money.

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

Highlights:

  • For the third consecutive month, mutual fund investors were net purchasers of fund assets, but they injected only $317 million into conventional funds for October.
  • Fixed income funds (+$15.4 billion for October) witnessed net inflows for the eighteenth month in a row, while money market funds (+$12.9 billion) experienced net inflows for the third consecutive month.
  • For the seventh straight month, investors were net sellers of stock & mixed-assets funds (-$28.0 billion).
  • APs were net purchasers of ETFs, injecting $77.4 billion for October, for their twenty-sixth month of consecutive inflows.
  • For the nineteenth month in a row, fixed income ETFs (+$15.3 billion for October) attracted net new money while investors padded the coffers of stock & mixed-assets ETFs (+$62.1 billion), their seventeenth straight month of net inflows.
  • For the fourth month in five, large-cap ETFs (+$12.5 billion) experienced the largest net inflows of the four capitalization groups.

Click here to download the October 2021 FundFlows Insight Report: Investors Embrace Inflation Protected Bond ETFs in October.

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