Lipper Fund Flows: Domestic Equity Funds Take $2.4 Billion Dive

By | August 8, 2015

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For the flows week ended August 5, investors watched the Dow Jones Industrial Average stumble through five straight days of losses. The week ended with an ADP report that said private employers added 185,000 jobs in July, well below estimates of 210,000 and suggesting a less-robust economic picture that might stave off a rate hike from the Federal Reserve. However, shortly afterward, the ISM index of service sector activity came in much stronger than expected for July, jumping from 56.3 points to 60.3 (anything over 50 indicates economic expansion). On Monday, the SPDR Select Sector Energy (NYSEARCA: XLE ) exchange-traded fund (ETF) fell 2% for a second straight day and by Wednesday was trading at prices last seen in August 2012. Equity mutual fund investors made net redemptions of $2.0 billion for the week and not surprisingly, they pulled money from domestic equity mutual funds (-$2.4 billion). Equity ETFs saw net outflows of $1.6 billion as investors pulled the plug on PowerShares QQQ ((NASDAQ: QQQ ), -$1.3 billion), SPDR S&P 500 ((NYSEARCA: SPY ), -$1.1 billion), and iShares Russell 2000 ((NYSEARCA: IWM ), -$808 million). The $14.2-billion Deutsche MSCI EAFE Hedged ((NYSEARCA: DBEF ), +$946 million) led the inflows list. Bond mutual fund investors, like their equity counterparts, took a risk-off attitude as they redeemed shares. Overall, taxable bond mutual funds saw net outflows of $1.2 billion for the week, while bond ETFs saw $454 million of net outflows. Funds in Lipper’s Loan Participation Funds (-$598 million) and High Yield Funds classifications (-$407 million) led category outflows. HY ETF investors redeemed a net $793 million for the week, while loan ETFs had flat activity. The week’s biggest ETF withdrawals occurred at iShares iBoxx $HY Corp ((NYSEARCA: HYG ), -$481 million) and iShares 20+ Treasury ((NYSEARCA: TLT ), -$169 million). Municipal bond mutual fund investors pulled $348 million from their accounts-for the thirteenth net outflow in the past 14 weeks. Money market funds saw net inflows of $20.3 billion, of which institutional investors added $15.5 billion and retail investors added $4.8 billion. Share this article with a colleague Scalper1 News

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