Investors Favor Domestic Equity ETFs Over Conventional Funds In March

Apr. 15, 2022 10:36 PM ETQQQ, VBR, IEMG, EFG, GLD, XLE, SQQQ, TWM, TLT, HYG2 Comments2 Likes
Tom Roseen profile picture
Tom Roseen
1.48K Followers

Summary

  • For the third straight month, mutual fund investors were net redeemers of fund assets, withdrawing $64.6 billion from conventional funds for March.
  • Fixed income funds (-$47.9 billion) witnessed net outflows for the fourth month in a row, while money market funds (+$6.7 billion) attracted net money for the first month in three.
  • For the twelfth straight month, investors were net sellers of stock & mixed-assets funds (-$23.4 billion).
  • APs were net purchasers of ETFs, injecting $94.7billion for March, for their fourteenth month of consecutive inflows.
  • And, for the second month in a row, fixed income ETFs (+$20.2 billion) witnessed net inflows while investors padded the coffers of stock & mixed-assets ETFs (+$74.6 billion), their twenty-second straight month of net inflows.

Digitally enhanced shot of a graph showing the ups and downs shares on the stock market

shapecharge/iStock via Getty Images

Investors were net redeemers of mutual fund assets for the third month in a row, redeeming $64.5 billion from the conventional funds business (excluding ETFs, which are reviewed in the section below) for March. For the twelfth month running, stock & mixed-assets funds experienced net outflows (-$23.4 billion). And as a result of the Federal Reserve Board hiking its key lending rate on March 16 by 25 basis points (bps) and with more to come, the fixed income funds macro-group—for the fourth consecutive month—witnessed net outflows, handing back $47.9 billion for March—its largest since March 2020. Money market funds (+$6.7 billion) took in money for the first month in three.

For the fourteenth straight month, ETFs witnessed net inflows, taking in $94.7 billion for March. Authorized participants (APs—those investors who actually create and redeem ETF shares) were net purchasers of stock & mixed-assets ETFs for the twenty-second consecutive month, injecting $74.6 billion into equity ETF coffers. For the second month in a row, they were net purchasers of bond ETFs—injecting $20.2 billion for the month. APs were net purchasers of all five equity-based ETF macro-classifications, padding the coffers of U.S. Diversified Equity ETFs (+$51.2 billion), Sector Equity ETFs (+$12.6 billion), World Equity ETFs (+$7.3 billion), Alternatives ETFs (+$3.1 billion), and Mixed-Assets ETFs (+$334 million).

In this report, I highlight the March 2022 fund-flows results and trends for both ETFs and conventional mutual funds (including variable annuity underlying funds).

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This article was written by

Tom Roseen profile picture
1.48K Followers
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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Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such 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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