Market Intelligence

Stock ETFs, corporate bonds and junk debt enjoy another week of inflows


By Jennifer Ablan

April 18 () - Investors' appetite for risk was on display yet again this week with huge cash inflows into U.S.-based stock exchange-traded funds, corporate bond funds and high-yield "junk" bond portfolios, according to Refinitiv's Lipper research service data on Thursday.

U.S.-based investment-grade corporate bond funds attracted more than $2.3 billion in the week ended Wednesday, extending their weekly inflow streak since late January, Lipper said. U.S.-based high-yield junk bond funds attracted more than $1.1 billion in the week ended Wednesday, their sixth consecutive week of inflows, Lipper said.

Tom Roseen, head of research services at Lipper, said a "tale of two cities" still exists within equities.

"Mom and Pop are still net sellers of equity funds, withdrawing $1.8 billion for the week, while (institutional investors) continue to pad the coffers of equity ETFs," Roseen said. "But for the 14th consecutive week, the average fund investor remained enamored by fixed-income funds, pouring in roughly $1.7 billion this week."

All told, Roseen said investors put money to work, partly evident in the cash withdrawals from money-market funds. Investors yanked cash from money funds to pay for taxes but they also felt compelled to put money to work in rising markets, he said. U.S.-based money market funds posted $54.5 billion in outflows in the week ended Wednesday, their largest cash withdrawal since August 2011.

"I am attributing that to tax season and investors' moves back into bonds and equity funds," Roseen said.

Outside the United States, U.S.-based emerging market funds attracted more than $417 million in the week ended Wednesday, extending their weekly inflow streak since early January, according to Lipper. U.S.-based international funds attracted $1.22 billion in the week ended Wednesday, their first inflows since mid-March, Lipper said.

The following is a broad breakdown of the flows for the week, including mutual funds and exchange-traded funds:

Sector Flow Change($ blns) Pct of Assets Assets($ blns) Count
All Equity Funds 5.507 0.08 7,264.112 11,745
Domestic Equities 4.543 0.09 5,170.972 8,376
Non-Domestic Equities 0.963 0.05 2,093.140 3,369
All Taxable Bond Funds 3.678 0.13 2,844.984 5,804
All Money Market Funds -54.502 -1.84 2,914.630 1,009
All Municipal Bond Funds 0.679 0.15 443.213 1,32

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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