May 17, 2022

Investors Sour on Domestic Equity ETFs and Conventional Funds in April

by Tom Roseen.

Investors were net redeemers of mutual fund assets for the fourth month in a row, redeeming $159.7 billion from the conventional funds business (excluding ETFs, which are reviewed in the section below) for April. For the thirteenth month running, stock & mixed-assets funds experienced net outflows (-$45.6 billion). And in anticipation of the Federal Reserve Board hiking its key lending rate on May 4 by a least 50 basis points (bps) and with more to come, the fixed income funds macro-group—for the fifth consecutive month—witnessed net outflows, handing back $43.5 billion for April. Money market funds (-$70.6 billion) suffered net redemptions for the third month in four.

For the first month in 32, ETFs witnessed net outflows, handing back $4.1 billion for April. Authorized participants (APs—those investors who actually create and redeem ETF shares) were net sellers of stock & mixed-assets ETFs for the first month in 23, withdrawing $13.0 billion from equity ETF coffers. For the third month in a row, they were net purchasers of bond ETFs—injecting $8.9 billion for the month. APs were net purchasers of three of the five equity-based ETF macro-classifications, padding the coffers of World Equity ETFs (+$4.5 billion), Sector Equity ETFs (+$3.0 billion), and Mixed-Assets ETFs (+$59 million), while being net sellers of U.S. Diversified Equity ETFs (-$20.0 billion) and Alternatives ETFs (-$539 million).

In this report, I highlight the April 2022 fund-flows results and trends for both ETFs and conventional mutual funds (including variable annuity underlying funds).

Highlights:

  • For the fourth straight month, mutual fund investors were net redeemers of fund assets, withdrawing $159.7 billion from conventional funds for April.
  • Fixed income funds (-$43.5 billion for April) witnessed net outflows for the fifth month in a row, while money market funds (-$70.6 billion) handed back money for the third month in four.
  • For the thirteenth straight month, investors were net sellers of stock & mixed-assets funds (-$45.6 billion).
  • APs were net redeemers of ETFs, withdrawing $4.1 billion for April—the first monthly net redemption in 32.
  • And, for the third month in a row, fixed income ETFs (+$8.9 billion for April) witnessed net inflows while investors were net redeemers of stock & mixed-assets ETFs (-$13.0 billion), their first monthly redemption in 26.
  • World equity ETFs (+$4.5 billion) took in net new money for the twenty-third consecutive month.

Click here to download the April 2022 FundFlows Insight Report: Investors Sour on Domestic Equity ETFs and Conventional Funds in April.

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