Conventional Fund Investors Remain Cautious In September, While APs Turn On The Afterburners

by: Tom Roseen

Summary

For the third month in a row, mutual fund investors were net purchasers of fund assets, injecting a net $13.5 billion into the conventional funds business.

For the first month in six, Thomson Reuters Lipper’s World Equity Funds macro-classification witnessed net outflows, handing back $2.8 billion for September.

For the twentieth consecutive month, authorized participants (APs) were net purchasers of ETFs, injecting $28.5 billion for September.

For the first month in seven, the Sector Equity ETF macro-classification (+$8.3 billion net) attracted the largest net draw of the five broad-based equity ETF macro groups.

Conventional mutual fund investors opted to sit on the sidelines in September, embracing fixed income and money market products, while authorized participants (APs - ETF investors) remained risk-seeking. Although mutual fund investors redeemed some $27.9 billion from stock and mixed-equity funds for the month, for the sixteenth consecutive month, APs were net purchasers, injecting $17.2 billion. Year to date through September 30, 2017, conventional equity mutual funds handed back some $119.4 billion net, while equity ETFs took in $226.4 billion.

On the fixed income side of the equation, the focus of fund investors and APs stayed in step, with conventional bond funds attracting $207.6 billion year to date and bond ETFs drawing in $101.3 billion for the same period. In this segment, I highlight the September fund-flow trends for both types of investment vehicles.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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