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February 15, 2024

Fixed Income ETFs Attract Record Net Inflows in January After the SEC Approves Bitcoin ETFs

by Tom Roseen.

Investors were net purchasers of mutual fund assets for the second month in three, injecting $24.4 billion into the conventional fund business (excluding ETFs, which are reviewed in the section below). However, the headline numbers are a bit misleading.

Stock & mixed-assets funds experienced net outflows (-$56.8 billion) for the thirty-fourth consecutive month. However, the fixed income funds macro-group—for the first month in six—witnessed net inflows, taking in $26.7 billion. And, in a continued flight to safety, investors padded the coffers of money market funds, injecting $54.5 billion for January.

For the twenty-first consecutive month, ETFs attracted net new money, taking in $65.9 billion for January.

Authorized participants (APs—those investors who create and redeem ETF shares) were net purchasers of stock & mixed-assets ETFs—also for the twenty-first month in a row—injecting $17.0 billion into equity ETF coffers. For the twenty-fourth month running, they were net purchasers of bond ETFs—injecting $49.0 billion for the month (their largest monthly net inflow on record). APs were net purchasers of three of the five equity-based ETF macro-classifications, padding the coffers of U.S. Diversified Equity ETFs (+$12.4 billion), World Equity ETFs (+$7.0 billion), and Mixed-Assets ETFs (+$89 million) while being net redeemers of Sector Equity ETFs (-$1.5 billion) and Alternatives ETFs (-$931 million).

In this report, I highlight the Janaury 2024 fund-flows results and trends for both ETFs and conventional mutual funds (including variable annuity underlying funds).

Highlights:

  • For the second month in three, mutual fund investors were net purchasers of fund assets, injecting $24.4 billion into conventional funds for January.
  • Money market funds (+$54.5 billion) witnessed net inflows for the third consecutive month.
  • Fixed income funds (+$26.7 billion) experienced net inflows for the first month in six, while investors were net sellers of stock & mixed-assets funds (-$56.8 billion) for the thirty-fourth month in a row.
  • APs were net purchasers of ETFs, injecting $65.9 billion for January.
  • Fixed income ETFs (+$49.0 billion, a record amount) witnessed net inflows for the twenty-fourth straight month, while investors were net purchasers of stock & mixed-assets ETFs (+$17.0 billion).
  • Grayscale Bitcoin Trust (GBTC, housed in Lipper’s Alternative Currency Strategies ETF classification) took in $20.7 billion for January.

Click here to download the January 2024 FundFlows Insight Report: Fixed Income ETFs Attract Record Net Inflows in January After the SEC Approves Bitcoin ETFs.

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