The week ended Wednesday, September 4th, saw far less new money allocated to equity mutual fund accounts than in recent weeks while outflows were way up for ETF investors. Taxable bond mutual funds fared better with only $700 million net outflows amidst a stronger bond market.
Equity mutual fund investors took their foot off the gas pedal this past week by allocating an estimated $782 million in new money to their accounts, far less than in recent weeks and in contrast to equity exchange-traded fund (ETF) investors who accelerated their withdrawals and pulled out some $5.9 billion net. It was the fourth consecutive week they’ve reduced their equity allocation, which now amounts to over $22 billion in total net withdrawals. As is typical during outflows weeks for ETFs, investors reduced holdings of SPDR S&P 500 (SPY), this time by $3.0 billion net.
Increased turmoil in the Middle East: Stronger bond market
Taxable bond mutual funds had a scant $700 million of net outflows as the bond markets showed some strength amid worsening tensions in the Middle East. Bond ETF investors actually came into the market on a net basis, adding in just under $200 million. They were buyers of intermediate-duration Treasury products such as ProShares Ultra 7-10 Year Treasury (UST), while popular corporate-debt products faced stronger redemptions. Muni debt mutual funds saw more redemptions net outflows of $1.2 billion and Money market funds had small net outflows of $2.6 billion.
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