Equity Fund Inflows Subside in November, and Almost All Inflows Directed into MFs Rather Than ETFs. Outflows from Bond Funds Accelerate.
As a whole, fund investors have turned more cautious on stocks this month after pumping $53.2 billion into all equity mutual funds and exchange-traded funds in October, the fourth-highest monthly inflow ever.
What is most striking is that almost all of this month’s inflow of $18.9 billion into all equity MFs and ETFs has been directed into MFs rather than ETFs. While U.S. equity MFs have received $7.6 billion, U.S. equity ETFs have issued just $200 million.
Similarly, while global equity MFs havereceived $9.8 billion, global equity ETFs have issued only $1.3 billion.
Our conclusion is that retail investors are more upbeat than institutional investors and financial advisors, who account for the bulk of ETF trading. Nevertheless, inflows into equity MFs are not high enough to be too alarming from a contrarian perspective and are nowhere close to record levels.
Meanwhile, bond funds are posting redemptions for the sixth consecutive month. Bond MFs and ETFs have redeemed $22.2 billion, already topping the outflow of $19.2 billion in October. Redemptions are picking up as the average fund has dropped 0.6% in price, the worst performance since August, when the average fund’s price fell 1.5%.
