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U.S. Weekly FundFlows Insight Report: Equity Funds Take In Net New Money For The Week In Spite Of Growing Inflation Fears

Mar. 02, 2018 3:25 AM ETSPY, QQQ, IVV, DXJ, FVD, AGG, HYG, LQD
Tom Roseen profile picture
Tom Roseen

For the second week in a row, investors were net purchasers of fund assets (including those of conventional funds and ETFs), injecting $6.4 billion. While fund investors were net redeemers of municipal bond funds (-$591 million) and money market funds (-$7.1 billion), they padded the coffers of equity funds (+$13.3 billion) and taxable bond funds (+$854 million) for the fund flows week ended February 28, 2018.

Investors cautiously pushed equity markets up ahead of new Federal Reserve Board Chair Jerome Powell's testimony before Congress, only to turn tail after Powell's testimony fueled inflation and interest rate-hike fears. However, for the fund flows week, the Dow Jones Industrial Average Price Only Index (+0.93%) and the Nasdaq Composite Price Only Index (+0.76%) posted returns in the black, while the Russell 2000 Price Only Index (-1.27%) suffered the only major decline of the U.S. broad-based indices.

Market Wrap-Up

At the beginning of the fund flows week on Thursday, February 22, the Dow and S&P 500 benchmarks witnessed another day of volatility but ended on the plus side as optimistic labor market data temporarily offset investors' concerns over inflation and rising interest rates. Investors learned that initial weekly U.S. jobless claims for the prior week declined 7,000 to 222,000, below the 233,000 estimated by analysts. On Friday, February 23, stocks surged, with the Dow climbing 347.51 points as interest in bank stocks grew for the day and as the Fed's semiannual monetary report saw broad improvement in the U.S. economy but didn't directly suggest a change in interest rate policy.

On Monday, the U.S. exchanges witnessed a broad-based rally led by tech and telecom issues as Fed officials downplayed the likelihood of a fourth interest rate hike in 2018. Despite a plunge in January durable goods orders and a rise in February consumer confidence, the stock market tanked

This article was written by

Tom Roseen profile picture
Tom Roseen is the Head of Research Services, joining from Janus in 1996. He is the editor and an author of Lipper's U.S. Research Studies, FundFlows Insight Reports and FundIndustry Insight Reports. He is involved in fund analysis and research, and contributes to the monthly and quarterly equity and fixed income FundMarket Insight reports, webcasts and podcasts, where he focuses on domestic and world fund performance and attribution. His areas of expertise include closed-end fund analysis, portfolio evaluation, equity and fixed income fund research, fund flows analysis, after-tax performance and Lipper Leaders. Tom has a BS in finance from Metropolitan State College of Denver and a Master's in International Management from the University of Denver.

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