Lipper's fund asset groups (including both mutual funds and ETFs) had net-positive flows of $3.3 billion for the fund flows week ended Wednesday, September 5. Money market funds (+$11.8 billion) were responsible for all the net inflows, while equity funds (-$7.2 billion), taxable bond funds (-$1.1 billion), and municipal debt funds (-$181 million) saw money leave.
The S&P 500 Index and the Dow Jones Industrial Average lost 0.87% and 0.57%, respectively, for the fund flows week. Both indices suffered the lion's share of their losses on the first trading day of the week as the markets were stung by the resurfacing of trade war concerns. There were reports that President Donald Trump was prepared to impose tariffs on another $200 billion of imports from China when the public comment period on the proposal expires on September 6. Economic news released during the week continued to point toward a strong economy. The core Price Consumption Expenditures (PCE) year-to-year index grew to 2.0% for July, up from 1.9% for June. The core PCE is the Federal Reserve's preferred inflation measure, and July's number represented the third time this year the index has hit the Fed's 2.0% target rate. The Commerce Department reported that U.S. consumer spending grew 0.4% for the second consecutive month in July. It was believed consumer spending is taking strength from the labor market, which is near full employment.
ETFs saw net money leave (-$4.6 billion) breaking a streak of eight straight weekly net inflows. All three asset groups suffered net outflows, led by equity ETFs (-$3.6 billion), bettered by taxable bond ETFs (-$939 million) and muni debt ETFs (-$43 million). SPDR S&P 500 ETF (SPY, -$9.1 billion) and iShares iBoxx $Investment Grade Corporate Bond ETF (LQD, -$1.5 billion) had the largest individual net outflows among equity ETFs and taxable bond ETFs, respectively.
Equity Mutual Funds
Equity mutual funds (-$3.6 billion) experienced net outflows for the eleventh straight week. Domestic equity funds (-$3.4 billion) were responsible for the lion's share of the net outflows, while non-domestic equity funds saw $232 million net leave. The largest net outflows among the respective peer groups belonged to Large-Cap Value Funds (-$928 million) and International Large-Cap Growth Funds (-$669 million).
Fixed Income Mutual Funds
The taxable bond (-$173 million) and muni debt (-$138 million) mutual fund groups both suffered minor net outflows for the week. The High Yield Funds (-$242 million) and Short Muni Debt Funds (-$48 million) peer groups suffered the largest net outflows for the two macro groups.
Money Market Mutual Funds
Money market funds took in $11.8 billion of net new money for the week. All the money market peer groups had net inflows for the week, led by Institutional U.S. Treasury Money Market Funds (+$6.2 billion) and Institutional U.S. Government Money Market Funds (+$2.6 billion).
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