🔥 Premium AI-powered Stock Picks from InvestingPro Now up to 50% OffCLAIM SALE

S&P 500 Index Funds See Largest Weekly Outflow on Record

Published 06/17/2024, 04:13 AM
NDX
-
UK100
-
US500
-
US2000
-
DE40
-
JP225
-
IVV
-
US2YT=X
-
US10YT=X
-
LQD
-
HYG
-
TLT
-
SSEC
-
VIX
-
EFV
-
IVW
-
SHV
-
DXY
-
BTC/USD
-
BTC/USD
-
IBIT
-

by Jack Fischer

During LSEG Lipper’s fund-flows week that ended June 12, 2024, investors were overall net purchasers of fund assets (including both conventional funds and ETFs) for the seventh week in eight, adding a net $6.3 billion.

This past week, money market funds (+$20.3 billion), taxable bond funds (+$5.8 billion), alternative investments (+$264 million), and tax-exempt bond funds (+$154 million) each saw inflows.

Equity funds (-$19.8 billion), mixed-assets funds (-$352 million), and commodities funds (-$60 million) reported outflows.

Both active (-$190 million) and passive (-$19.6 billion) equity funds suffered outflows. Actively managed equity funds have seen 12 straight weeks of outflows, while passive equity funds logged their third-largest weekly outflow in over the past 500 weeks—largest outflow since week ending February 7, 2018.

Active (+$678 million) fixed income funds observed their seventh consecutive weekly inflow. Passive (+$5.3 billion) fixed income funds reported their fifth inflow over the last six weeks.

In aggregate, spot bitcoin ETFs saw an inflow (+$502 million) over the week, led by iShares Bitcoin Trust (NASDAQ:IBIT) (IBIT).

Index Performance

At the close of LSEG Lipper’s fund-flows week, U.S. broad-based equity indices reported mixed returns— S&P 500 (+1.25%), Nasdaq (+2.45%), Russell 2000 (-0.33%), and DJIA (-0.25%). The Nasdaq has realized six straight weeks of positive returns.

Broad-based fixed income indices also saw mixed returns—FTSE U.S. Broad Investment Grade Bond Total Return Index (-0.14%), FTSE High Yield Market Total Return Index (+0.39%), and FTSE Municipal Tax-Exempt Investment Grade Bond Index (+0.57%).

Overseas, the DAX Total Return (+0.12%), FTSE 100 (+0.26%), and Nikkei 225 (+1.34%) appreciated, while the S&P/TSX Composite (-0.64%) and Shanghai Composite (-1.01%) saw losses.

Rates/Yields

Both the 2-year (+1.04%) and 10-year (+1.14%) Treasury yield rose over the course of the week. Since the start of the year, both yields have risen (+12.31% and +12.00%, respectively).

According to Freddie Mac, the 30-year fixed-rate average (FRM) decreased for the fifth week in six, with the weekly average currently at 6.95%. The US Dollar Index (DXY, +0.36%) increased while the VIX (-4.90%) decreased over the course of the week.

For the meeting, the CME FedWatch Tool has the likelihood of the Federal Reserve leaving interest rates unchanged at 87.6%. This tool forecasted an 24.6% possibility of a 25-bps cut one month ago. The next meeting is scheduled for July 31, 2024.

Exchange-Traded Equity Funds

Exchange-traded equity funds recorded a $14.7 billion weekly outflow, its largest weekly outflow since the week ending December 12, 2021, but only the third outflow in 16 weeks. The macro-group posted a 0.72% gain on the week, its second straight week in the black.

Large-cap equity ETFs (-$12.8 billion), emerging markets equity ETFs (-$1.2 billion), and world sector equity ETFs (-$1.1 billion) posted the largest outflows. Under large-cap ETFs, the S&P 500 Index Funds Lipper classification (-$17.4 billion) was the primary detractor, seeing its largest outflow on record. This was the first outflow in eight weeks for large-cap ETFs.

Sector equity ETFs (+$2.0 billion), equity income ETFs (+$520 million), and developed global markets ETFs (+$74 million) witnessed the only weekly inflows under equity ETFs. Lipper’s Science and Technology ETF (+$1.8 billion) classification attributed to most of the sector equity inflows.

Over the past fund-flows week, the two top equity ETF flow attractors were iShares S&P 500 Growth ETF (NYSE:IVW(IVW, +$3.5 billion) and iShares MSCI EAFE Growth ETF  (IVV, +$1.5 billion).

Meanwhile, the two bottom equity ETFs in terms of weekly outflows were iShares Core S&P 500 ETF (NYSE:IVV) (IVV, -$17.0 billion) and iShares MSCI EAFE Value ETF (NYSE:EFV(EFV, -$2.1 billion).

Exchange-Traded Fixed Income Funds

Exchange-traded taxable fixed income funds observed a $6.8 billion weekly inflow—the macro group’s sixth straight weekly inflow. Fixed income ETFs reported a loss of 0.35% on average, marking the second loss in three weeks.

General domestic taxable fixed income ETFs (+$2.6 billion), short/intermediate investment-grade ETFs (+$1.8 billion), and government & Treasury ETFs (+$1.7 billion) were the top subgroups under taxable bond ETFs to observe inflows. General domestic taxable fixed income ETFs were led by the Corporate Debt BBB-Rated ETF (+$1.5 billion) classification.

High yield ETFs (-$22 million) and emerging markets debt ETFs (-$17 million) were the only taxable fixed income subgroups to record an outflow on the week. High yield ETFs have logged two outflows in the last three weeks despite realizing back-to-back positive returns.

Municipal bond ETFs reported a $259 million inflow over the week, marking the second consecutive weekly inflow and seventh over the last 10. Municipal bond ETFs saw also realized their second gain (+0.47%) in as many weeks.

iShares 20+ Year Treasury Bond (NASDAQ:TLT) ETF (TLT, +$1.5 billion) and iShares iBoxx $ Investment Grade Corporate Bond ETF (NYSE:LQD) (LQD, +$987 million) attracted the largest amounts of weekly net new money under fixed income ETFs.

On the other hand, iShares iBoxx $ High Yield Corporate Bond ETF (NYSE:HYG) (HYG, -$352 million) and iShares Short Treasury Bond ETF (BMV:SHV) (SHV, -$305 million) suffered the largest weekly outflows.

Conventional Equity Funds

Conventional equity funds (ex-ETFs) witnessed weekly outflows (-$5.1 billion) for the one-hundred-and-twenty-second straight week. Conventional equity funds posted a weekly return of positive 0.57%, the second week of gains in three.

Large-cap funds (-$1.3 billion), multi-cap funds (-$1.1 billion), and mid-cap funds (-$779 million) were the top conventional equity fund subgroups to realize weekly outflows. Large-cap conventional mutual funds logged their twenty-fifth outflow over the past 26 weeks, led by the Large-Cap Growth classification (-$825 million).

Emerging markets equity funds (+$105 million) was the sole subgroup under conventional equity mutual funds to post an inflow over the trailing week. The prior net inflow to emerging markets equity funds was 22 weeks ago.

Conventional Fixed Income Funds

Conventional taxable-fixed income funds realized an outflow of $1.1 billion—marking the eighth outflow over the past 10 weeks. The macro-group realized a loss of 0.74% on average—their third sub-zero return in four weeks.

Short/intermediate investment-grade funds (-$864 million), short/intermediate government & Treasury funds (-$206 million), and emerging markets debt funds (-$73 million) led taxable fixed income subgroups in net outflows. Short/intermediate investment-grade funds suffered their fifth outflow in six weeks.

General domestic taxable fixed income funds (+$119 million), alternative bond funds (+$62 million), and high yield funds (+$30 million) were the only taxable fixed income subgroups to observe inflows over the week.

Municipal bond conventional funds (ex-ETFs) returned a positive 0.63% over the fund-flows week, giving the subgroup its second straight weekly gain. Tax-exempt fixed income mutual funds experienced a $105 million outflow, marking the fourth outflow in five weeks.

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.