Scalper1 News
By Patrick Keon Lipper’s fund macro-groups (including both mutual funds and exchange-traded funds [ETFs]) had aggregate net inflows of $8.6 billion for the fund-flows week ended Wednesday, September 23. This activity marked the second consecutive week of overall positive flows; the groups took in $4.7 billion of net new money the prior week. Money market funds (+$10.3 billion) saw the largest net inflows this past week, while municipal bond funds (+$231 million) also experienced positive flows. Equity funds (-$2.0 billion) suffered the largest net outflows, while taxable bond funds had net outflows of $33 million for the week. The S&P 500 Index (-56.55 points) and the Dow Jones Industrial Average (-460.06 points) were down 2.83% and 2.75%, respectively, for the week. Both indices suffered the lion’s share of their losses during two trading days (Friday, September 18 and Tuesday, September 22). The major market news of the week was the Federal Reserve’s decision to leave interest rates unchanged. Despite an improving U.S. labor market, Fed Chair Janet Yellen cited the inflation rate (which is significantly below the 2.0% target) and global growth concerns (China) as the reason for keeping rates where they are. The Fed’s inaction was the main impetus for the losses incurred by the indices, as it created fear about the depth of China’s economic problems and uncertainty about when the Fed will raise rates. In an attempt to jawbone the market, Atlanta Fed President Dennis Lockhart said he still expects the Fed to hike rates later this year because of stronger jobs data outweighing the below-target inflation rate. The statement achieved its desired result (at least temporarily), with the market posting gains on the day of the statement (Monday, September 21) before retreating again on Tuesday, September 22, on renewed concerns about the slumping global economy. The net inflows for the week into money market funds (+$10.3 billion) broke a three-week string of net outflows for the group, which saw almost $29 billion leave its coffers. Institutional money market funds accounted for the entirety of the net inflows this past week, taking in just over $13.0 billion of new money. Equity ETFs were responsible for all of the net outflows (-$4.9 billion) for the week, while equity mutual funds had $2.9 billion of net inflows. Non-domestic equity funds took in the majority of the net new money (+$2.2 billion), while domestic equity funds contributed $673 million to the total. The SPDR S&P 500 Trust ETF ( SPY , -$8.3 billion) was responsible for all of the net outflows on the ETF side. In a reverse of the equity fund activity, taxable bond mutual funds (-$1.4 billion net) had money leave, while ETF products had $1.3 billion of net inflows. Lipper’s Core Bond Funds classification (-$2.3 billion net) was by far the largest contributor to the outflows on the mutual fund side, while for ETFs the iShares 20+ Year Treasury Bond ETF ( TLT , +$414 million) and the iShares iBoxx $ High Yield Corporate Bond ETF ( HYG , +$212 million) had the two largest net inflows. Municipal bond mutual funds took in $322 million of net new money, breaking a streak of four straight weeks of net outflows. Funds in Lipper’s national municipal bond fund group contributed $338 million of net inflows to the total, while single-state municipal bond funds saw $16 million leave. Scalper1 News
Scalper1 News