The Markets June 12, 2012

Mutual Funds See Modest Inflows in May

Investors put $14 billion in net inflows into stock and bond mutual funds in the U.S. in May.
Reported by

That was a drop from the $24.5 billion in net inflows to stock and bond funds in April. May’s numbers also marked the lowest volume of positive net flows since long-term mutual funds experienced net outflows in December 2011, according to Strategic Insight, an Asset International company.  

In May, domestic equity funds saw net outflows of nearly $5 billion, during a month of poor stock returns: the average U.S. stock mutual fund lost 4.2% in the month, on an asset-weighted basis. That brought total U.S. equity fund flows to -$7.4 billion for the first five months of 2012—a sharp reversal from the same period a year ago, when U.S. equity funds enjoyed cumulative net inflows of $40 billion.   

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International/Global equity funds posted net inflows of $5 billion in May, but that was down from the $6.5 billion they took in the previous month. In the first five months of 2012, international equity funds drew aggregate net inflows of $27.6 billion.

 

 

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Taxable bond funds saw net inflows of $9 billion in May, the smallest amount of net inflows they have experienced since they attracted just over $8 billion in December 2011. Investors continued to use bond funds as income-producing solutions amid extremely low rates. Short- and intermediate-maturity bond funds were the most popular types of mutual funds in May, leading the way with nearly $6 billion in combined net inflows. Emerging market bond and global bond funds followed in popularity.   

Taxable bond funds have drawn an estimated $110 billion in the first five months of 2012, far ahead of the $80 billion in net flows that taxable bond funds took in over the course of 2011’s first five months.  

Meanwhile, munciplei bond funds saw net inflows of $5 billion in May. Muni bond funds drew $24 billion in net inflows through the first five months of the year, as long-term muni bond issuance has risen substantially from year-earlier levels.   

Money-market funds saw net outflows of $2 billion in May, which was an improvement over April’s net outflows of $22 billion. Ultra-low yields continued to hamper demand for money market funds even as more investors turned to them as a safe haven.    

More information about Strategic Insight is available here.  

 

The Markets June 12, 2012

Only Bond ETFs Saw Inflows in May

U.S. exchange-traded funds (ETFs) saw roughly $2 billion in net inflows in May.
Reported by

That brought total ETF net inflows to $60 billion for the first five months of the year—a pace that could result in the sixth straight year of $100 billion or more in annual net inflows to U.S. ETFs, according to Strategic Insight, an Asset International company.   

Bond ETFs were the only major category to post net inflows in May, drawing net nearly $8 billion. Equity ETFs saw an estimated $6 billion in net outflows, with both domestic and international equity products seeing net redemptions. Real estate and gold ETFs also saw significant net inflows.   

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At the end of May, U.S. ETF assets (including exchange-traded notes) stood at $1.13 trillion, down from $1.2 trillion at the end of April.

 

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