August 15, 2023

Despite Rate Hike, Investors Embrace Fixed Income Funds in July

by Tom Roseen.

Investors were net sellers of mutual fund assets for the second month in a row, withdrawing $38.8 billion from the conventional funds business (excluding ETFs, which are reviewed in the section below).

Stock & mixed-assets funds experienced net outflows (-$55.9 billion) for the twenty-eighth consecutive month. However, despite an interest rate hike by the Federal Reserve Board on July 26, the fixed income funds macro-group—for the third month in a row—witnessed net inflows, taking in $12.3 billion. With investors’ attraction to rising yields, the money market funds macro-group (+$7.8 billion) witnessed its third straight monthly net inflow.

ETFs attracted net new money for the fifteenth consecutive month, taking in $61.3 billion for July. Authorized participants (APs—those investors who create and redeem ETF shares) were net purchasers of stock & mixed-assets ETFs—also for the fifteenth month in a row—injecting $44.8 billion into equity ETF coffers. For the eighteenth month running, they were net purchasers of bond ETFs—injecting $16.5 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 (+$30.6 billion), Sector Equity ETFs (+$8.0 billion), World Equity ETFs (+$6.1 billion), and Mixed-Assets ETFs (+$410 million) while being net sellers of Alternatives ETFs (-$254 million).

In this report, I highlight the July 2023 fund-flows results and trends for both ETFs and conventional mutual funds (including variable annuity underlying funds).


  • For the second consecutive month, mutual fund investors were net sellers of fund assets, withdrawing $35.8 billion from conventional funds for July.
  • Fixed income funds (+$12.3 billion for July) and money market funds (+$7.8 billion) witnessed net inflows for the third straight month.
  • Investors were net sellers of stock & mixed-assets funds (-$55.9 billion) for the twenty-eighth straight month.
  • Authorized Participants (APs) were net purchasers of ETFs, injecting $61.3 billion for July.
  • Fixed income ETFs (+$16.5 billion for July) witnessed net inflows for the eighteenth straight month, while investors were net purchasers of stock & mixed-assets ETFs (+$44.8 billion).
  • Year to date, equity ETFs attracted a net $155.8 billion, while conventional equity funds handed back $332.3 billion.

Click here to download the July 2023 FundFlows Insight Report: Despite Rate Hike, Investors Embrace Fixed Income Funds in July.

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