Scalper1 News
By Patrick Keon Lipper’s fund macro-groups (including both mutual funds and exchange-traded funds [ETFs]) suffered net outflows for the first time in five weeks, with over $8.1 billion leaving their coffers during the fund-flows week ended Wednesday, November 4. Money market funds (-$13.8 billion) accounted for the majority of the net outflows, while taxable bond funds (-$100 million) also posted negative numbers. Equity funds (+$5.7 billion) and municipal bond funds (+$63 million) both had net inflows for the week. The S&P 500 Index (+0.57%) and the Dow Jones Industrial Average (+0.50%) both recorded positive performance numbers for the trading week. These numbers capped a month in which both indices recorded their largest monthly percentage increases since October 2011; the Dow was up 8.5% for October, while the S&P 500 appreciated 8.3% for the month. October’s stellar performance came on the heels of two consecutive down months that saw the S&P 500 give back 8.9% in total and the Dow retreat 8.0%. October’s rally could be largely attributed to the easing of global growth fears (which were the main impetus for the meltdown of the prior two months), thanks to the European Central Bank’s indicating it is considering more quantitative easing and China’s economy looking more stable. The Federal Reserve continued to jawbone the market with additional hawkish comments about the potential for an interest rate hike in December. Despite data suggesting a cooling economy should weigh against any moves in December (weak third quarter GDP of 1.5%, a drop in pending home sales for the second consecutive month, and consumer spending recording its smallest increase in eight months), Federal Reserve Chair Janet Yellen continued to prepare the market for a possible rate increase next month. Yellen stated that a rate hike in December would not inhibit the recovery and continued to point to low unemployment and growth in the inflation rate as the key determining factors. This past week’s net outflows for money market funds (-$13.8 billion) were largely attributable to institutional money market funds (-$14.1 billion). The week marked the second week in the last three the group has suffered net outflows. Similar to the prior week, equity ETFs were once again responsible for the overwhelming majority of the net inflows (+$4.0 billion) for the equity group, while equity mutual funds did increase their contribution to $1.7 billion. On the ETF side, Lipper’s Financial Services Funds (+$1.3 billion) and Science & Technology Funds (+$814 million) classifications were the largest contributors to the positive flows, while for mutual funds nondomestic equity funds (+$931 million) accounted for slightly more of the net inflows than did domestic equity funds (+$791 million). Mutual funds were responsible for all the net inflows for taxable bond funds (+$1.5 billion), while ETF products saw over $1.6 billion of net outflows. Lipper’s High Yield Funds and Core Bond Funds classifications (+$1.2 billion and +$494 million, respectively) recorded the two largest net inflows on the mutual fund side. For ETFs two Treasury products had the largest individual net outflows: iShares 1-3 Year Treasury Bond ETF ((NYSEARCA: SHY ), -$1.1 billion) and iShares 7-10 Year Treasury Bond ETF ((NYSEARCA: IEF ), -$247 million). Municipal bond mutual funds took in $53 million of net new money – for their fifth consecutive week of positive flows. Funds in Lipper’s national municipal bond fund classifications (+$30 million) contributed the most to the week’s net inflows. Scalper1 News
Scalper1 News