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ICI Fund Flow Survey | 40 Weeks and Counting

Takeaway: The domestic equity outflow streak has maintained the fastest pace on record and is now the third longest running.

Investment Company Institute Mutual Fund Data and ETF Money Flow:

In the 5-day period ending December 2nd, investors withdrew another -$8.0 billion from domestic equity mutual funds, bringing the year-to-date total outflow to -$155.0 billion. Additionally, the table below shows that the current streak of redemptions is running at -$3.9 billion per week, the fastest pace on record which has now aggregated to -$157.8 billion in total drawdown, the second largest in history (we define a streak as being intact unless broken by 4 consecutive weeks of subscriptions). Meanwhile, equity ETFs continue to mop up flows with +$6.6 billion in subscriptions in the most recent 5 days as investors favor passive exposure. We continue to recommend a short position in shares of T. Rowe Price as a way to express this ongoing shift out of active products (see our TROW reports).

 

In other asset classes, total fixed income flows (including mutual funds and ETFs) were moderately weak at -$206 million following Fed Chair Yellen's hawkish testimony. Additionally, investors displayed some risk aversion by shoring up +$18 billion in money market funds last week.

 

ICI Fund Flow Survey | 40 Weeks and Counting - ICI19

 

 

In the most recent 5-day period ending December 2nd, total equity mutual funds put up net outflows of -$8.9 billion, trailing the year-to-date weekly average outflow of -$1.0 billion and the 2014 average inflow of +$620 million. The outflow was composed of international stock fund withdrawals of -$890 million and domestic stock fund withdrawals of -$8.0 billion. International equity funds have had positive flows in 42 of the last 52 weeks while domestic equity funds have had only 8 weeks of positive flows over the same time period.

 

Fixed income mutual funds put up net outflows of -$1.0 billion, trailing the year-to-date weekly average inflow of +$75 million and the 2014 average inflow of +$926 million. The outflow was composed of tax-free or municipal bond funds contributions of +$918 million and taxable bond funds withdrawals of -$2.0 billion.

 

Equity ETFs had net subscriptions of +$6.6 billion, outpacing the year-to-date weekly average inflow of +$2.4 billion and the 2014 average inflow of +$3.2 billion. Fixed income ETFs had net inflows of +$829 million, trailing the year-to-date weekly average inflow of +$1.1 billion and the 2014 average inflow of +$1.0 billion.

 

ICI Fund Flow Survey | 40 Weeks and Counting - ICI1

 

Mutual fund flow data is collected weekly from the Investment Company Institute (ICI) and represents a survey of 95% of the investment management industry's mutual fund assets. Mutual fund data largely reflects the actions of retail investors. Exchange traded fund (ETF) information is extracted from Bloomberg and is matched to the same weekly reporting schedule as the ICI mutual fund data. According to industry leader Blackrock (BLK), U.S. ETF participation is 60% institutional investors and 40% retail investors.



Most Recent 12 Week Flow in Millions by Mutual Fund Product: Chart data is the most recent 12 weeks from the ICI mutual fund survey and includes the weekly average for 2014 and the weekly year-to-date average for 2015:

 

ICI Fund Flow Survey | 40 Weeks and Counting - ICI2

 

ICI Fund Flow Survey | 40 Weeks and Counting - ICI3

 

ICI Fund Flow Survey | 40 Weeks and Counting - ICI4

 

ICI Fund Flow Survey | 40 Weeks and Counting - ICI5

 

ICI Fund Flow Survey | 40 Weeks and Counting - ICI6



Cumulative Annual Flow in Millions by Mutual Fund Product: Chart data is the cumulative fund flow from the ICI mutual fund survey for each year starting with 2008.

 

ICI Fund Flow Survey | 40 Weeks and Counting - ICI12

 

ICI Fund Flow Survey | 40 Weeks and Counting - ICI13

 

ICI Fund Flow Survey | 40 Weeks and Counting - ICI14

 

ICI Fund Flow Survey | 40 Weeks and Counting - ICI15

 

ICI Fund Flow Survey | 40 Weeks and Counting - ICI16



Most Recent 12 Week Flow within Equity and Fixed Income Exchange Traded Funds: Chart data is the most recent 12 weeks from Bloomberg's ETF database (matched to the Wednesday to Wednesday reporting format of the ICI), the weekly average for 2014, and the weekly year-to-date average for 2015. In the third table are the results of the weekly flows into and out of the major market and sector SPDRs:

 

ICI Fund Flow Survey | 40 Weeks and Counting - ICI7

 

ICI Fund Flow Survey | 40 Weeks and Counting - ICI8



Sector and Asset Class Weekly ETF and Year-to-Date Results: In sector SPDR callouts, investors withdrew -$367 million or -6% from the long treasury TLT ETF following Fed Chairwoman Yellen's testimony that signaled a high probability of a rate hike later this month.

 

ICI Fund Flow Survey | 40 Weeks and Counting - ICI9



Cumulative Annual Flow in Millions within Equity and Fixed Income Exchange Traded Funds: Chart data is the cumulative fund flow from Bloomberg's ETF database for each year starting with 2013.

 

ICI Fund Flow Survey | 40 Weeks and Counting - ICI17

 

ICI Fund Flow Survey | 40 Weeks and Counting - ICI18



Net Results:

The net of total equity mutual fund and ETF flows against total bond mutual fund and ETF flows totaled a negative -$2.0 billion spread for the week (-$2.2 billion of total equity outflow net of the -$206 million outflow from fixed income; positive numbers imply greater money flow to stocks; negative numbers imply greater money flow to bonds). The 52-week moving average is +$857 million (more positive money flow to equities) with a 52-week high of +$27.9 billion (more positive money flow to equities) and a 52-week low of -$19.0 billion (negative numbers imply more positive money flow to bonds for the week.)

  

ICI Fund Flow Survey | 40 Weeks and Counting - ICI10

 


Exposures:
The weekly data herein is important for the public asset managers with trends in mutual funds and ETFs impacting the companies with the following estimated revenue impact:

 

ICI Fund Flow Survey | 40 Weeks and Counting - ICI11 



Jonathan Casteleyn, CFA, CMT 

 

 

 

Joshua Steiner, CFA







The Macro Show Replay | December 10, 2015

 


December 10, 2015

Hedgeye's Daily Trading Ranges are twenty immediate-term (TRADE) buy and sell levels, with our intermediate-term (TREND) view and the previous day's closing price for each name.  Click HERE for a video from Hedgeye CEO Keith McCullough on how to use these risk ranges.

 

  • Bullish Trend
  • Bearish Trend
  • Neutral

INDEX BUY TRADE SELL TRADE PREV. CLOSE
UST10Y
10-Year U.S. Treasury Yield
2.31 2.13 2.22
SPX
S&P 500
2,039 2,075 2,047
RUT
Russell 2000
1,138 1,173 1,145
COMPQ
NASDAQ Composite
4,987 5,103 5,022
NIKK
Nikkei 225 Index
19,221 19,840 19,301
DAX
German DAX Composite
10,402 10,876 10,554
VIX
Volatility Index
16.32 20.58 19.61
DXY
U.S. Dollar Index
96.67 99.31 97.33
EURUSD
Euro
1.05 1.09 1.08
USDJPY
Japanese Yen
121.23 122.55 121.40
WTIC
Light Crude Oil Spot Price
36.08 39.91 37.21
NATGAS
Natural Gas Spot Price
2.01 2.17 2.07
GOLD
Gold Spot Price
1,046 1,089 1,072
COPPER
Copper Spot Price
1.99 2.10 2.06
AAPL
Apple Inc.
113 119 115
AMZN
Amazon.com Inc.
653 681 664
PCLN
Priceline.com Inc.
1,231 1,318 1,294
COST
Costco Wholesale Corp.
156 164 159
NFLX
Netflix, Inc.
119 130 124
KMI
Kinder Morgan Inc.
13.23 19.50 16.81

 

 


Hedgeye Statistics

The total percentage of successful long and short trading signals since the inception of Real-Time Alerts in August of 2008.

  • LONG SIGNALS 80.64%
  • SHORT SIGNALS 78.61%

FLASHBACK: Hedgeye Energy Analyst Kevin Kaiser Lays Out Short $KMI Thesis (9/11/13)

Here's a video from deep in the Hedgeye vault (check out the old studio). Energy analyst Kevin Kaiser first lays out his short thesis on Kinder Morgan (KMI) with Managing Director Todd Jordan. While Kaiser's short KMI call was clearly a success, we think his hair was the real winner that day. Seriously, check out that flow.


Cartoon of the Day: Nah, Nah, Nah (I Can't Hear You)...

Cartoon of the Day: Nah, Nah, Nah (I Can't Hear You)... - Deaflation cartoon 12.09.2015

 

"Did you understand the illusion of growth (inflation)?," wrote Hedgeye CEO Keith McCullough earlier today. "#Deflation risk dominated 2015 returns. Period."


7 Statements About Kinder Morgan That Are Pretty Laughable Now | $KMI

Takeaway: Kaiser stuck to his guns on Kinder Morgan despite overwhelming (and uninformed) criticism.

In case you're new to this story, our Energy analyst Kevin Kaiser was relentlessly attacked for his analysis on Kinder Morgan, first put forth in 2013, by a wide array of supposed "experts." Yesterday, he was vindicated.

 

Here's an excerpt from today's Early Look written by Hedgeye's Darius Dale:

 

...Ranging from analytical critiques that at least attempted to poke holes in his analysis to thoughtless ad hominem attacks, the amount of pushback Kevin has received over the past 2+ years regarding his bearish research in the MLP space has been nothing shy of legendary. Maintaining conviction in his analysis was the only thing that allowed him to overcome the rash of criticism that accompanied being the lone bear on a few of the most beloved stocks and management teams in modern U.S. equity market history.

 

Below is a list of some of the more absurd criticisms levied at his call. 

 

Disclaimer: This list is nowhere near comprehensive.

 

7 Statements About Kinder Morgan That Are Pretty Laughable Now | $KMI - kmi chart

 

1) “It turns out we were stubborn and we were right, and Hedgeye was flippant and disrespectful and wrong. We chose to believe in Rich Kinder, and not in his critics, because we believed him when he always said his companies are "companies run by shareholders for shareholders." It looks like it wasn't worth waiting for the market to prove Hedgeye right -- because, alas, when it comes to Kinder Morgan and today's huge bid, it never, ever will be.” – Jim Cramer, “Cramer: Kinder’s Triumph,” 8/11/14.

 

2) “We proved the doubters wrong the first time around and I anticipate the same result this time... You sell. I’ll buy. And we see who comes out best in the long run.” – Rich Kinder, 1/15/2014.

 

3) “… Sometime on Tuesday, a 26-year-old man with a fancy title and very limited work experience is going to elaborate claims he made yesterday that the largest US midstream MLP, founded by an industry legend, is “a house of cards... This is modern “investing” at its most pathetic and absurd... There is no need to wait for next week’s presentation, because any credibility contest between Richard Kinder and Kevin Kaiser is unlikely to last long.” – Igor Greenwald, InvestingDaily, 9/6/2013.

 

4) “At $40 a share, there was little doubt that Kinder Morgan was overvalued, but even with the headwinds ahead of it, it's become seriously undervalued here at $21. And I'm recommending it, as well as buying it myself.” – Dan Dicker, 12/2/2015.

 

5) “Don't put too much stock in this latest bit of research from Kevin Kaiser and Hedgeye… in truth, the Kinder Morgan companies are well-managed, boast solid assets, and will play a big role in meeting America's future energy infrastructure needs.” – Brendan Mathews, Motley Fool, 9/12/2013

 

6) “We believe that the issues raised by [Kaiser] are well known, transparent, and appropriately discounted especially to those following them a long time.” – Credit Suisse analyst John Edwards, 9/12/2013.

 

7) “Richard Kinder, the CEO of KMI, is a brilliant operator and a brilliant capital allocator.  He is a self-made billionaire with a net worth of roughly $9B. This is a company with good economics, great management, and a reasonable valuation. The company is buying back its shares and its warrants.  Kinder has come out and said that the company is undervalued.” Glenn Chan, 1/30/2014.


Daily Trading Ranges

20 Proprietary Risk Ranges

Daily Trading Ranges is designed to help you understand where you’re buying and selling within the risk range and help you make better sales at the top end of the range and purchases at the low end.

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