Conventional Equity Funds Suffer Largest Net Redemptions Since March 2020 in November

Shrugging off handsome plus-side returns for both equity and fixed income funds in November, investors were net redeemers of mutual fund assets for the eleventh month in a row, redeeming $84.2 billion from the conventional funds business (excluding ETFs, which are reviewed in the section below). For the twentieth month running, stock & mixed-assets funds experienced net outflows (-$99.6 billion—their largest monthly outflows since March 2020). Despite the 10-year Treasury yield falling 42 basis points (bps) during the month on better-than-expected inflation reports, the fixed income funds macro-group—for the third month in a row—witnessed net outflows, handing back $36.4 billion. Money market funds (+$51.7 billion) attracted net new money for the second consecutive month.

For the seventh consecutive month, ETFs attracted net new money, taking in $63.1 billion for November. Authorized participants (APs—those investors who create and redeem ETF shares) were net purchasers of stock & mixed-assets ETFs—also for the seventh month in a row—injecting $40.0 billion into equity ETF coffers. For the tenth month in a row, they were net purchasers of bond ETFs—injecting $23.2 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 (+$21.3 billion), World Equity ETFs (+$15.0 billion), Sector Equity ETFs (+$2.2 billion), and Alternatives ETFs (+$1.6 billion) while being net sellers of Mixed-Assets ETFs (-$70 million).

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

Highlights:

• For the eleventh straight month, mutual fund investors were net redeemers of fund assets, withdrawing $84.2 billion from conventional funds for November.
• Fixed income funds (-$36.4 billion for November) witnessed net outflows for the third consecutive month, while money market funds (+$51.7 billion) attracted net money for the second month in a row.
• For the twentieth straight month, investors were net sellers of stock & mixed-assets funds (-$99.6 billion).
• Authorized Participants (APs) were net purchasers of ETFs, injecting $63.1 billion for November.
• And, for the tenth straight month, fixed income ETFs (+$23.2 billion for November) witnessed net inflows while investors were net purchasers of stock & mixed-assets ETFs (+$40.0 billion).
• Emerging Markets ETFs (+$4.5 billion) witnessed their strongest monthly net inflows since April 2022.