Despite recent market volatility, figures from Thomson Reuters Lipper show that year-to-date flows and returns for equity funds remain positive.
- Average equity fund return still 0.22 percent higher in first two months of 2018.
- Lipper chart shows a return in weekly fund inflows at end of February.
- Taxable bond funds attract a preliminary US$1.5 billion net for February.
Equity mutual funds (-4.07 percent) witnessed in February their first month of negative returns in 16.
This followed the early/mid-month market meltdown that was tagged by many pundits as having entered correction territory (a price decline of at least 10 percent from a recent market high).
However, year-to-date through to February 28, the average equity fund return (+0.22 percent) was still on the plus side and still up 15 percent for the one-year period.
For the month of February, Thomson Reuters Lipper’s Mixed-Asset Funds macro-classification (comprising primarily target-date and target-risk funds) mitigated losses (-2.98 percent) better than its U.S. Diversified Equity Funds (-3.61 percent), Sector Equity Funds (-5.0 percent), and World Equity Funds (-4.43 percent) counterparts.
In spite of the recent market losses, investors appeared to continue to embrace non-domestic equity funds, injecting US$16.9 billion net into the macro-group in February, while being net redeemers of domestic equity funds (-$34.4 billion).
However, for the year to date, estimated net flows into both groups remained on the plus side — $15 million and $57.3 billion respectively.
Taxable bond funds
While fund investors were net redeemers of municipal bond funds (-$591 million) and money market funds (-$7.1 billion) for the fund-flows week ended February 28, they padded the coffers of equity funds (+$13.3 billion) and taxable bond funds (+$854 million).
Interestingly, in spite of the upward shift in the yield curve and increasing inflation concerns, taxable bond funds attracted a preliminary $1.5 billion net for the month of February.
Net inflows into corporate investment-grade debt funds (+$10 billion) offset the net outflows from corporate high-yield debt funds (-$10.4 billion) and the net inflows into government-Treasury funds (+$5 billion).
That kept the tally in positive territory after accounting for net outflows from smaller groups.
Watch: The evolution of Lipper from its inception to the present day
Preliminary year-to-date figures showed taxable bond funds attracting some $41.7 billion net, with corporate investment-grade debt funds collecting the lion’s share of net new money (+$35.9 billion).
Join us for the Thomson Reuters Lipper Fund Awards, UK in London on March 14, 2018.