prev

[UNLOCKED] Fund Flow Survey | Tax-Free Municipal Flows Up Over +200% to Start '16

Takeaway: In continued risk aversion, investors are piling into tax-free municipal bonds.

Editor's Note: This is a complimentary research note which was originally published February 4, 2016 by our Financials team. If you would like more info on how you can access our institutional research please email sales@hedgeye.com.

 

* * *

 

Investment Company Institute Mutual Fund Data and ETF Money Flow:

In the 5-day period ending January 27th, investors returned to making contributions to equity ETFs with a +$2.0 billion net subscription and international equity funds also saw some interest with a +$1.3 billion inflow. However, the exodus from domestic equity funds continued with a -$6.2 billion outflow last week, negating total net inflows to the total equity category. Additionally, taxable bond funds continued to give up AUM, losing -$1.8 billion to withdrawals. The category has been taking it on the chin recently and has had only 23 weeks of positive inflows in the last 52 weeks. However, investor interest continues in tax-free bonds with investors making a positive contribution of +$856 million. Weekly average contributions in tax-free bonds are up over +200% in 2016, with a mean weekly contribution of +$1.1 billion thus far in the New Year versus the 2015 weekly average of +$314 million. Money funds saw a +$14 billion inflow during the week as investors also shored up cash.


[UNLOCKED] Fund Flow Survey | Tax-Free Municipal Flows Up Over +200% to Start '16 - ICI1 large 2 9 16

 

In the most recent 5-day period ending January 27th, total equity mutual funds put up net outflows of -$4.9 billion, trailing the year-to-date weekly average outflow of -$3.2 billion and the 2015 average outflow of -$1.5 billion. The outflow was composed of international stock fund contributions of +$1.3 billion and domestic stock fund withdrawals of -$6.2 billion. International equity funds have had positive flows in 41 of the last 52 weeks while domestic equity funds have had only 6 weeks of positive flows over the same time period.

 

Fixed income mutual funds put up net outflows of -$917 million, trailing the year-to-date weekly average outflow of -$834 million and the 2015 average outflow of -$463 million. The outflow was composed of tax-free or municipal bond funds contributions of +$856 million and taxable bond funds withdrawals of -$1.8 billion.

 

Equity ETFs had net subscriptions of +$2.0 billion, outpacing the year-to-date weekly average outflow of -$4.8 billion but trailing the 2015 average inflow of +$2.8 billion. Fixed income ETFs had net inflows of +$5.3 billion, outpacing the year-to-date weekly average inflow of +$2.7 billion and the 2015 average inflow of +$1.0 billion.

 

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 2015 and the weekly year-to-date average for 2016:

 

[UNLOCKED] Fund Flow Survey | Tax-Free Municipal Flows Up Over +200% to Start '16 - ICI2

 

[UNLOCKED] Fund Flow Survey | Tax-Free Municipal Flows Up Over +200% to Start '16 - ICI3

 

[UNLOCKED] Fund Flow Survey | Tax-Free Municipal Flows Up Over +200% to Start '16 - ICI4

 

[UNLOCKED] Fund Flow Survey | Tax-Free Municipal Flows Up Over +200% to Start '16 - ICI5

 

[UNLOCKED] Fund Flow Survey | Tax-Free Municipal Flows Up Over +200% to Start '16 - 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.

 

[UNLOCKED] Fund Flow Survey | Tax-Free Municipal Flows Up Over +200% to Start '16 - ICI12

 

[UNLOCKED] Fund Flow Survey | Tax-Free Municipal Flows Up Over +200% to Start '16 - ICI13

 

[UNLOCKED] Fund Flow Survey | Tax-Free Municipal Flows Up Over +200% to Start '16 - ICI14

 

[UNLOCKED] Fund Flow Survey | Tax-Free Municipal Flows Up Over +200% to Start '16 - ICI15

 

[UNLOCKED] Fund Flow Survey | Tax-Free Municipal Flows Up Over +200% to Start '16 - 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 2015, and the weekly year-to-date average for 2016. In the third table are the results of the weekly flows into and out of the major market and sector SPDRs:

 

[UNLOCKED] Fund Flow Survey | Tax-Free Municipal Flows Up Over +200% to Start '16 - ICI7

 

[UNLOCKED] Fund Flow Survey | Tax-Free Municipal Flows Up Over +200% to Start '16 - ICI8



Sector and Asset Class Weekly ETF and Year-to-Date Results: In sector SPDR callouts, the defensive utilities XLU and long treasuries TLT ETFs experienced the largest percentage inflows last week of +3% or +$180 million to the XLU and +3% or +$226 million to the TLT.

 

[UNLOCKED] Fund Flow Survey | Tax-Free Municipal Flows Up Over +200% to Start '16 - 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.

 

[UNLOCKED] Fund Flow Survey | Tax-Free Municipal Flows Up Over +200% to Start '16 - ICI17

 

[UNLOCKED] Fund Flow Survey | Tax-Free Municipal Flows Up Over +200% to Start '16 - ICI18



Net Results:

The net of total equity mutual fund and ETF flows against total bond mutual fund and ETF flows totaled a negative -$7.3 billion spread for the week (-$2.9 billion of total equity outflow net of the +$4.4 billion inflow to fixed income; positive numbers imply greater money flow to stocks; negative numbers imply greater money flow to bonds). The 52-week moving average is +$437 million (more positive money flow to equities) with a 52-week high of +$20.5 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.)

  

[UNLOCKED] Fund Flow Survey | Tax-Free Municipal Flows Up Over +200% to Start '16 - 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:

 

[UNLOCKED] Fund Flow Survey | Tax-Free Municipal Flows Up Over +200% to Start '16 - ICI11 


Under 60 Seconds: YELP’s Earnings Report

Hedgeye highlights three key points from YELP's rough quarter courtesy of our Internet & Media analyst Hesham Shaaban.


Crash! Boom! Bang! Global Central Planners Can't Stop The Selloff

Takeaway: Try as they may, central planners can't stop global stock markets from crashing.

Crash! Boom! Bang! Global Central Planners Can't Stop The Selloff - central bankers cartoon 09.08.2015 large

 

"What happens when the baseline belief of central-market-planning breaks?" Hedgeye CEO Keith McCullough asked in a note to subscribers this morning.

 

Good question. Here's the answer:

 

"Breaking bad, the belief system is here. Japan says “negative yields” (and they got them – 10yr JGB -0.04% now). But the BOJ didn’t get Down Yen, Up Nikkei – they got Up Yen, Crashing Nikkei! (Nikkei -5.4% overnight, -22.8% since July)"

 

Despite the BOJ's best efforts, the Nikkei continues to crash.

 

Then came the mother of all short squeezes on hedge fund crowd long the Yen.

 

 

Over in Europe, the Italian stock market looks dreadful. Central planners at the ECB haven't been able to do anything about it. Sorry Draghi.

 

"If you thought the central planning experiment in the US and Japan went bad, look at what Draghi is doing to the banks in Europe – Italy’s stock market is down another -1.5% this am taking it’s crash (since July) to -32.8% (if the SPX crashed that % it would be at 1436 fyi)"

 

 

Even Germany is crashing from its peak.

 

 

The point here? The Fed, ECB and BOJ can't arrest economic gravity. Growth is slowing and it has been despite central bankers' best efforts. 

 

So while Old Wall media continues to talk about China and oil, we're sticking with our process. That's kept our subscribers out of a lot of trouble here at home and abroad.


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 78.57%

RTA Live: February 9, 2016

 


HedgeyeRetail (2/9) | RH Locks Up SF Anchor Space, KATE, NKE

Takeaway: RH secures anchor space at SF Pier 70. KATE lapping 2015 quality of sale initiatives -- one of many tailwinds in 2016.

RH - RH Secures Lease on Historic Landmark Building at San Francisco’s Pier 70

(http://www.businesswire.com/news/home/20160208005257/en/)

 

Typical RH maneuver in its backyard of SF. Taking a Flagship spot in a new redevelopment, while being one of the first retailers to sign on the dotted line. Leads to below market rents, in an up and coming retail space. That allows the landlords to attract the right type of cotenants around RH as the anchor.

HedgeyeRetail (2/9)  |  RH Locks Up SF Anchor Space, KATE, NKE - 2 9 2016 chart1

 

KATE - Running Flash Sale. Same Time As Last Year.

Promotional cadence planned flat in 2016 after 2015 quality of sale initiatives at both wholly owned and wholesale distribution in the US. One of the many tailwinds for the brand as we enter FY16.

HedgeyeRetail (2/9)  |  RH Locks Up SF Anchor Space, KATE, NKE - 2 9 2016 kate2 chart2

 

NKE - Nike hosting All-Star sneaker events in 4 cities this year where it promises new releases and surprise drops

Another demonstration of the content owner, upstaging its traditional wholesale partners when connecting with consumers.

HedgeyeRetail (2/9)  |  RH Locks Up SF Anchor Space, KATE, NKE - 2 9 2016 chart3

(http://news.nike.com/news/nike-jordan-all-star-experience)

 

NKE/FL - The footwear business could be entirely software-based in 15-20 years

(http://vampfootwear.com/preparing-for-a-3-d-printed-footwear-industry/)

 

AMZN - AWS announces Cross-Platform 3D Game Engine Integrated with AWS cloud &Twitch

(http://www.businesswire.com/news/home/20160209005740/en/)

 

KORS - Marc Jacobs announces new accessory strategy and price restructuring -- moving leather towards 70% of sales, exceeding Michael Kors' 68.4%

(http://wwd.com/accessories-news/handbags/marc-jacobs-accessory-strategy-with-restructured-pricing-10342545/)

 

ULTA -  Jessica Alba's Honest Beauty line teams up with Ulta to expand nationwide distribution

(http://www.prnewswire.com/news-releases/honest-beauty-expands-nationwide-distribution-with-ulta-beauty-300216110.html)

 

SKX - Sketchers to extend contract with US marathoner Meb Keflezighi

(http://footwearnews.com/2016/business/athletic-outdoor/skechers-meb-keflezighi-marathon-runner-contract-extension-190442/)

 

Burberry - Fashion shows becoming marketing tool as Burberry will move to a see-now/buy-now collection model -- will no longer unveil clothes six months before they are available in stores

(http://www.nytimes.com/2016/02/05/fashion/burberry-announces-a-see-now-buy-now-system-for-new-collections.html?_r=0)

 

FL - FL trying to create buzz with 2016 World Sneaker Championship partnership -- will sell winning design in stores later this year

(http://footwearnews.com/2016/focus/athletic-outdoor/pensole-2016-world-sneaker-championship-foot-locker-190615/)

 

LULU - Athletic apparel retailer Yogasmoga, a fast-growing LULU rival, to open first NYC location

(http://www.chainstoreage.com/article/fast-growing-lululemon-rival-open-its-first-nyc-store)

 

SBH - Sally Beauty Holdings has big ambitions for more stores and new services as it hits 5,000-store milestone

(http://www.retailingtoday.com/article/one-watch-sally-beauty-becomes-real-looker)


World-Renowned Demographer Neil Howe Joins Hedgeye Risk Management

Leading Thinker on Generations Who Coined the Term ‘Millennials’ Joins Forces with Independent Research Firm

FOR IMMEDIATE RELEASE

 

STAMFORD, Conn., February 9, 2016 -- Hedgeye Risk Management, a leading independent provider of investment research and online financial media firm, announced today that renowned historian, economist, and demographer Neil Howe has joined the company as Managing Director to lead Demography sector research. Howe is regarded as a leading authority on generations and social change in America, an acclaimed bestselling author, and highly sought-after speaker.

 

“We are incredibly excited to welcome someone of Neil’s caliber to our growing team,” said Hedgeye CEO Keith McCullough. “He is a world-class thinker and our country’s leading authority on today’s generations. His demographic insight will augment our existing research and help our customers identify the most significant, secular trends in the U.S., abroad, and their investing implications.”

 

World-Renowned Demographer Neil Howe Joins Hedgeye Risk Management  - zz howe pic

 

Howe has written over a dozen books on generations, demographic change, and fiscal policy, many of them with William Strauss. Their first book, Generations, was called “the most stimulating book on American history that I have ever read” by Vice President Al Gore, who sent a copy to every member of Congress. Newt Gingrich called it “an intellectual tour de force.” The Boston Globe wrote of their book, The Fourth Turning, “If Howe and Strauss are right, they will take their place among the great American prophets.”

 

Howe and Strauss originally coined the term “Millennial Generation” in 1991, and wrote the pioneering book on this generation, Millennials Rising. His work has been featured frequently in the media, including USA Today, CNN, the New York Times, and CBS’ 60 Minutes.

 

"I'm thrilled to be working with the Hedgeye team,” said Howe. “Everyone I’ve met here is smart, superbly informed, and—most importantly—unafraid to make non-consensus calls and stick by them. Over the next several years, asset managers the world over will desperately need a no-BS source of unbiased insights. I look forward to helping Hedgeye fill that need."

 

Previously, with American businessman and philanthropist Peter “Pete” Peterson, Howe co-authored On Borrowed Time, a pioneering call for budgetary reform. He later co-authored The Graying of the Great Powers with Richard Jackson, a seminal work in the emerging field of “political demography.”

                                                                                                                                                 

Howe is also a recognized authority on global aging, long-term fiscal policy, and migration. He is a senior associate to the Center for Strategic and International Studies (CSIS) in Washington, D.C.

 

He received his B.A. at U.C. Berkeley and later earned graduate degrees in economics and history from Yale University.

 

Neil Howe Talks 2016 GOP Field ON Real Conversations

Click image to watch.

World-Renowned Demographer Neil Howe Joins Hedgeye Risk Management  - zz neil and keith rc

 

ABOUT HEDGEYE RISK MANAGEMENT

 

Hedgeye Risk Management is an independent investment research and online financial media firm. Focused exclusively on generating and delivering actionable investment ideas in a proven buy-side process, the firm combines quantitative, bottom-up and macro analysis with an emphasis on timing. The Hedgeye team features some of the world's most regarded research analysts, all with buy-side experience, covering Macro, Financials, Energy, Healthcare, Retail, Gaming, Lodging & Leisure (GLL), Restaurants, Industrials, Consumer Staples, Internet & Media, Housing, and Materials.

 

CONTACT: Dan Holland

dholland@hedgeye.com

203.562.6500

 


the macro show

what smart investors watch to win

Hosted by Hedgeye CEO Keith McCullough at 9:00am ET, this special online broadcast offers smart investors and traders of all stripes the sharpest insights and clearest market analysis available on Wall Street.

next