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Lipper Fund Flows: Domestic Equity Funds Lose While Markets Gain Ground

By Jeff Tjornehoj Stock markets rebounded this past week after Greece came back to the bargaining table with its creditors and acceded to even harsher demands than it had rejected a week earlier and after stocks in China appeared to slow their freefall. For the fund-flows week ended July 15, the Dow Jones Industrial Average climbed 535 points to end above 18,000 and regained ground it had lost over the prior three weeks of the Greek debt drama. Equity mutual fund investors withdrew an estimated $4.4 billion net for the week. Not surprisingly, they pulled money from domestic equity mutual funds (-$1.6 billion), which have been out of favor much of this year. Equity exchange-traded funds (ETFs) saw net inflows of $3.6 billion, although investors may have been taking profits, selling off financial services products (-$1.6 billion). The week’s biggest individual equity ETF recipient was the S PDR S&P 500 Trust ETF ( SPY , +$4.4 billion ) , while huge selling hit the F inancial Select Sector SPDR ETF ( XLF , -$1.5 billion ) and the iShares MSCI EAFE ETF ( EFA , -$975 million ) . Bond mutual fund investors continued to redeem shares of funds in Lipper’s High Yield Funds classification, which had net outflows of $272 million, while ETF investors in the same classification added a net $1.5 billion. Overall, taxable bond mutual funds saw net inflows of $473 million for the week. Mutual fund investors pulled some cash out of Core Bond Funds (-$234 million) and added a scant $97 million to Core Plus Bond Funds. Bond ETF investors pushed $2.2 billion into their accounts to create combined (mutual funds and ETFs) net inflows of $2.6 billion. The week’s top destinations for bond ETF investors were the iShares iBoxx $ High Yield Corporate Bond ETF ( HYG , +$1.0 billion ) and the SPDR Barclays Capital High Yield Bond ETF ( JNK , +$420 million ) . Municipal bond mutual fund investors pulled $75 million from their accounts for the eleventh weekly net outflows in a row. Money market funds saw net outflows of $9.4 billion, of which institutional investors pulled $9.3 billion and retail investors redeemed $100 million. Share this article with a colleague

Lipper Fund Flows: Equity Funds Post Gains Amidst Greece News

By Patrick Keon The broad market equity indices rallied on the last trading day of the fund-flows week ended Wednesday, June 10, 2015, to reduce their overall losses for the week. The Dow Jones Industrial Average and the S&P 500 Index gained 236.36 and 25.05 points, respectively, on that day. This spike enabled both the Dow (-75.87 points) and S&P 500 (-8.87 points) to close the week with losses of only 0.41% each. Speculation about an impending Federal Reserve interest rate hike and about Greece dominated the financial news for the week. Stronger economic data pointed to an interest rate hike by the Fed this fall. The Labor Department reported that the economy had generated 280,000 new jobs for May – far more than anticipated. U.S. data services hinted at a possible upward revision to Q1 GDP as data suggested consumer spending was higher than initially estimated. And, New York Federal Reserve President William Dudley commented that he still expects there to be a rate hike this year. Greece started the week off on a down note, informing the International Monetary Fund on Thursday, June 4, that it intended to combine the four loan payments due in June into one lump-sum payment on June 30 (with the first payment due on Friday, June 5, being skipped). The markets did not react favorably to this news; both the Dow and the S&P 500 shed 0.9% on June 4. But the key piece of news contributing to this past Wednesday’s rally was that Greece, Germany, and France had agreed to ramp up negotiations in order to avoid a default by Greece. Turning our attention to the week’s fund-flow activity, Lipper’s fund macro-groups (including both mutual funds and exchange-traded funds [ETFs]) had aggregate net outflows of $7.5 billion for the week. Money market funds (-$7.2 billion), taxable bond funds (-$2.6 billion), and municipal bond funds (-$412 million) all suffered net outflows, while equity funds grew their coffers by $2.8 billion net. The majority of the outflows from taxable bond funds came from ETFs (-$2.0 billion), while mutual funds had $653 million leave. Within the ETF universe the two biggest individual net outflows came from high-yield products iShares iBoxx $ High Yield Corporate Bond ETF ((NYSEARCA: HYG ), -$1.1 billion) and SPDR Barclays High Yield Bond ETF ((NYSEARCA: JNK ), -$763 million). High yield was also the main culprit for mutual funds; the group saw $809 million leave. Municipal bond mutual funds had negative flows of $409 million net for the week. Continuing the trend we saw in taxable fixed income funds, high-yield muni debt funds were the single largest contributor (-$239 million) to the net outflows. ETFs (+$2.0 billion) accounted for the majority of net new money into equity funds, while mutual funds contributed $800 million to the inflows. The two largest net inflows among individual ETFs were into SPDR S&P 500 ETF ((NYSEARCA: SPY ), +$812 million) and Financial Select Sector SPDR ((NYSEARCA: XLF ), +$530 million). For mutual funds, nondomestic equity funds (+$1.6 billion) were responsible for all the positive net flows, while domestic equity funds (-$800 million) once again saw money leave their coffers. After taking in $8.0 billion of net new money the previous week, money market funds had net outflows of approximately the same amount (-$7.2 billion) this past week. Institutional money market funds were responsible for $5.5 billion of the week’s outflows.