Skip to content
Thomson Reuters

Equity funds still positive despite market volatility

Tom Roseen

09 Mar 2018

In spite of the volatile climate, equity markets have remained resolute. Photography: Brian Snyder
In spite of the volatile climate, equity markets have remained resolute. Photography: Brian Snyder

Despite recent market volatility, figures from Thomson Reuters Lipper show that year-to-date flows and returns for equity funds remain positive.

  1. Average equity fund return still 0.22 percent higher in first two months of 2018.
  2. Lipper chart shows a return in weekly fund inflows at end of February.
  3. 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.

Find out more about Thomson Reuters Lipper, the global leader in independent fund performance data

Weekly estimated net flows ($Bil), and returns (%), equity funds (including ETFs)

Domestic redemptions

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.

Global fund flows
Global fund flows

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.

Get Funds insight straight to your inbox, sign up for LAI newsletters

Thomson Reuters Lipper Fund Awards

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.

Discover how Thomson Reuters can enable you to quickly uncover hidden opportunities with comprehensive data and content

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.

Lipper Alpha Insight

Are European ETFs at their peak? The rise of financial data platforms What’s the future for buy-side trading? RTS 27 reporting and the issues to address Russia 2018: Best moments of the Global Sports Forum Can MiFID II solve FRTB? Buy-side research usage after MiFID II Eikon App Studio: 3 Highlights for July Avoid an earnings miss with StarMine What’s the future of investment research?