Fixed income investors have been placing their faith in passive funds for some time, with tracker funds pulling in significant money while their active equivalents are in the red.   Chart 1: UK Asset Class Flows, Passive and Active Mutual Funds and ETFs, 2022 (£bn) Source: Refinitiv Lipper   This is well illustrated by UK net fund flows over 2022. The most obvious thing from even a cursory glance at Chart 1 is that, while it was a bad year for risk assets, passive bond funds have fared rather better. While their active equivalents suffered redemptions of more than £20bn,

While U.S. December inflation figures (6.5%) declined significantly from their top in June (9.1%), the combination of higher prices, rising interest rates, and geopolitical concerns weighed on investors’ wealth creation over the course of the year. During 2022, the Federal Reserve raised the fed-funds rate seven times, including four consecutive increases of 75 basis points (bps), shifting the interest rate range from 0% to 0.25% up to 4.25% to 4.50%—a 15-year high. This had a significant impact on both equity and fixed income returns, which from a historical perspective were usually not very highly correlated—not true for 2022. The average

For the Refinitiv Lipper fund-flows week ended Wednesday, April 27, investors turned a cold shoulder to equity mutual funds and ETFs, redeeming $7.6 billion and $1.2 billion, respectively. The average equity fund (including ETFs) suffered a 6.17% decline for the week, its largest one-week decline since the fund-flows week ended March 25, 2020—just after California became the first state to issue stay-at-home orders to fight against the spread of the novel coronavirus. Equities tanked during the fund-flows week as investors weighed the implications of aggressive interest hikes by the Federal Reserve, Russia continuing to wage war on Ukraine, prolonged supply

The big news this week was the results of the July Consumer Price Index (CPI), published on Wednesday, August 11, and the Producer Price Index (PPI), released on Thursday, August 12. Both the CPI and PPI reports highlighted concerning 12-month increases. The CPI all-items index rose 5.4% over the last 12 months (hovering around 13-year highs). The PPI reported the final demand index jumped 7.8% for the 12 months ended July 2021, the largest advance since the data was first calculated in 2010. While the 12-month index increases are headline-grabbing, ask yourself where you were a year ago. The economy

The Lipper Loan Participation Funds classification—including both conventional mutual funds and ETFs—has seen a massive influx of flows since the start of the year compared to its historical average. Total estimated net flows for March were $5.8 billion, representing the second largest March inflows to date. Q1 2021 estimated net inflows totaled $14.0 billion, equating to the classification’s third largest start to a calendar year of all time. Over the past two weeks, Lipper Loan Participation Funds have drawn in more than $2 billion alone and have been net positive in weekly flows for 14 straight weeks (check out the

For the fund-flows week ended January 13, 2021, some investors appeared to be in search of fixed-income securities that were either tied to inflation or adjust for rising yields, while others remained in search of yield. For the flows week, investors injected net new money into taxable fixed income funds (+$9.0 billion, including ETFs) and municipal bond funds (+$2.6 billion). As had been the case for the entirety of 2020, corporate investment-grade debt funds attracted the lion’s share of estimated net flows this week, taking in $6.9 billion. Flexible funds and international & global debt funds were the runners up,

After a dismal showing in March and the first week in April, taxable bond funds are now back in favor. During the six-week COVID-19 bond market meltdown, which continued through the fund-flows week ended April 8, 2020, investors were net redeemers of taxable bond funds (including ETFs). The largest weekly net outflows on record for the group occurred on March 25 (-$62.0 billion) and March 18 (-$55.9 billion), respectively. During the selloff, investors worried about individual firms’ credit quality and market liquidity as the global economy entered a state of lockdown, but their fears were assuaged after the Federal Reserve

For the ninth consecutive week, investors were overall net purchasers of fund assets (including those of conventional funds and ETFs), injecting $78.7 billion for Lipper’s fund-flows week ended April 29, 2020. Fund investors were net purchasers of money market funds (+$83.0 billion) and taxable fixed income funds (+$4.0 billion), while being net redeemers of equity funds (-$7.0 billion) and municipal bond funds (-$1.3 billion) this week. Market Wrap-Up For the fund-flows week ended April 29, 2020, markets trended toward the upside as investors watched state governors cautiously reopen their economies, the number of reported coronavirus cases continued to slow, and

For the Lipper fund-flows week ended Wednesday, April 15, 2020, investors appeared to be a little more game at putting risk back in their portfolios, injecting a net $62.9 billion into mutual funds and ETFs. Fund investors were net purchasers of money market funds (+$46.8 billion), taxable fixed income funds (+$10.3 billion), equity funds (+$5.0 billion), and municipal bond funds (+$833 million) this week. However, for the equity side of the business, we see that fund investors remained reluctant during this turbulent time to jump back into the fray, being net redeemers of equity funds, withdrawing a net $2.7 billion

For the Lipper fund-flows week ended Wednesday, February 5, 2020, investors continued to pad the coffers of taxable bond funds (including ETFs), injecting a net $7.0 billion for the group’s fifth consecutive week of net inflows. Taxable bond funds have witnessed nine consecutive weeks of plus-side performance, returning 0.15% during the most recent flows week. Year to date, the group has already attracted a whopping $65.6 billion, with conventional taxable bond funds attracting $47.7 billion and taxable bond ETFs taking in $17.9 billion. The corporate investment-grade debt funds (+$41.6 billion) macro-group attracted the lion’s share of net new money year