As part of the monthly Thomson Reuters Lipper Research Series, we explore the trends affecting the net fund flows of conventional funds in October.
Conventional mutual fund investors continued their search for yield in October, padding the coffers of fixed-income funds.
Authorized participants (APs) – those investors that actually create and redeem exchange-traded fund (ETF) shares – remained risk-seeking.
Mutual fund investors continued to give stock & mixed-equity funds a cold shoulder for the month, redeeming some US$15.9 billion.
For the seventeenth consecutive month, APs were net purchasers of stock & mixed-equity ETFs, injecting US$36.9 billion.
In the year to October 31, 2017, conventional equity mutual funds handed back some US$135.3 billion net, while equity ETFs took in US$263.3 billion.
On the fixed income side of the equation, the focus of fund investors and APs stayed in step, with conventional bond funds attracting US$239.1 billion year to date and bond ETFs drawing in $111.1 billion for the same period.
Assessing the trends in conventional funds
For the fourth month in a row, mutual fund investors were net purchasers of fund assets, injecting a net US$6.9 billion into the conventional funds business.
Fixed income funds (+US$31.5 billion) witnessed net inflows for October, while investors were net redeemers of stock & mixed-asset funds (-US$15.9 billion) and money market funds (-US$8.7 billion).
For the sixth month in seven, Thomson Reuters Lipper’s World Equity Funds macro-classification witnessed net inflows, taking in US$4.5 billion for October.
For the twenty-first consecutive month, authorized participants (APs) were net purchasers of ETFs, injecting US$46.7 billion for October.
APs injected a net US$36.9 billion into stock & mixed-asset ETFs and were net purchasers of bond ETFs, injecting a net US$9.8 billion.
For the second month in three, the U.S. Diversified Equity (USDE) ETFs macro-classification (+US$19.7 billion net for October) attracted the largest net draw of the five broad-based equity ETF macro-groups.