July 19, 2022

Conventional Fund Investors Move to the Sidelines and ETFs in June

by Tom Roseen.

Investors were net redeemers of mutual fund assets for the sixth month in a row, redeeming $102.2 billion from the conventional funds business (excluding ETFs, which are reviewed in the section below) in June. For the fifteenth month running, stock & mixed-assets funds experienced net outflows (-$63.0 billion). And after the Federal Reserve Board hiked its key lending rate on June 15 by 75 basis points (bps) and another 75-100 bps expected on July 27, the fixed income funds macro-group—for the seventh consecutive month—witnessed net outflows, handing back $62.7 billion for June. Money market funds (+$23.5 billion) witnessed net inflows for the first month in three.

For the second consecutive month, ETFs witnessed net inflows, taking in $37.8 billion for June. Authorized participants (APs—those investors who actually create and redeem ETF shares) were net purchasers of stock & mixed-assets ETFs—also for the second month in a row—injecting $35.8 billion into equity ETF coffers. For the fifth month in a row, they were net purchasers of bond ETFs—injecting $2.1 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 (+$38.4 billion), World Equity ETFs (+$5.2 billion), Alternatives ETFs (+$3.0 billion), and Mixed-Assets ETFs (+$23 million), while being net sellers of Sector Equity ETFs (-$10.9 billion).

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

Highlights:

  • For the sixth straight month, mutual fund investors were net redeemers of fund assets, withdrawing $102.2 billion from conventional funds for June.
  • Fixed income funds (-$62.7 billion for June) witnessed net outflows for the seventh month in a row, while money market funds (+$23.5 billion) attracted net new money for the first month in three.
  • For the fifteenth straight month, investors were net sellers of stock & mixed-assets funds (-$63.0 billion).
  • APs were net purchasers of ETFs, injecting $37.8 billion during the month.
  • And, for the fifth month in a row, fixed income ETFs (+$2.1 billion for June) witnessed net inflows while investors were net purchasers of stock & mixed-assets ETFs (+$35.8 billion).
  • Once again, sector equity ETFs (-$10.9 billion) witnessed net redemptions for the second month in a row.

Click here to download the June 2022 FundFlows Insight Report: Conventional Fund Investors Move to the Sidelines and ETFs in June.

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