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January 18, 2024

Stock & Mixed Assets ETFs Attract Record Net Inflows in December While Mutual Funds See Redemptions

by Tom Roseen.

Investors were net sellers of mutual fund assets for the third month in four, withdrawing $86.0 billion from the conventional fund business (excluding ETFs, which are reviewed in the section below).

Stock & mixed-assets funds experienced net outflows for the thirty-third consecutive month (-$92.6 billion, their largest since December 2022). The fixed income funds macro-group—for the fifth month in a row—suffered net redemptions, handing back $12.1 billion. And, in a flight to safety, investors padded the coffers of money market funds, injecting $18.8 billion for December.

For the twentieth consecutive month, ETFs attracted net new money, taking in a record $129.6 billion for December (their largest monthly net inflows since at least September 2009).

Authorized participants (APs—those investors who create and redeem ETF shares) were net purchasers of stock & mixed-assets ETFs—also for the twentieth month in a row—injecting $112.5 billion into equity ETF coffers. For the twenty-third month running, they were net purchasers of bond ETFs—injecting $17.1 billion for the month. APs were net purchasers of all five equity-based ETF macro-classifications, padding the coffers of U.S. Diversified Equity ETFs (+$85.8 billion), World Equity ETFs (+$19.5 billion), Sector Equity ETFs (+$5.3 billion), Alternatives ETFs (+$1.6 billion), and Mixed-Assets ETFs (+$372 million).

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

Highlights:

  • For the third month in four, mutual fund investors were net redeemers of fund assets, withdrawing $86.0 billion from conventional funds for December.
  • Money market funds (+$18.8 billion) witnessed net inflows for the second consecutive month.
  • Fixed income funds (-$12.1 billion) suffered net redemptions for the fifth straight month while investors were net sellers of stock & mixed-assets funds (-$92.6 billion) for the thirty-third month in a row.
  • APs were net purchasers of ETFs, injecting a record $129.6 billion for December.
  • Fixed income ETFs (+$17.1 billion) witnessed net inflows for the twenty-third straight month while investors were net purchasers of stock & mixed-assets ETFs (+$112.5 billion).
  • For 2023, equity ETFs attracted a net $384.5 billion while conventional equity funds handed back $659.6 billion.

Click here to download the December 2023 FundFlows Insight Report: Stock & Mixed Assets ETFs Attract Record Net Inflows in December While Mutual Funds See Redemptions.

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