• It's Here!

    Etf Pro

    Get the big financial market moves right, bullish or bearish with Hedgeye’s ETF Pro.

Takeaway: Brexit worries prompted investors to pull funds from all but three asset classes last week.

Editor's Note: Below is a complimentary research note originally published June 23, 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 June 15th, Brexit worries prompted investors to withdraw funds from every asset class but investment grade bonds, municipals, and ICI's other bond category which took in +$469 million, +$1.6 billion, and +$512 million respectively. Total equity mutual fund and ETF flows came in at -$6.0 billion while total bond mutual funds and ETFs were virtually flat with a -$2 million outflow. With the Brexit vote ongoing today, we expect another weak survey next week which will capture more jitters ahead of this volatility event. Year-to-date, Bond ETFs have been the best category with +$3.7 billion in subscriptions on average each week (versus a weekly mean in 2015 of just +$571 million). Municipal bond funds have also been high grossing with +$1.3 billion in subscriptions per week versus just a +$313 million average last year.


[UNLOCKED] Fund Flow Survey | Brexit-ing Equity Mutual Funds - ICI19

 

In the most recent 5-day period ending June 15th, total equity mutual funds put up net outflows of -$5.9 billion, trailing the year-to-date weekly average outflow of -$2.7 billion and the 2015 average outflow of -$1.6 billion.

 

Fixed income mutual funds put up net inflows of +$1.5 billion, trailing the year-to-date weekly average inflow of +$2.4 billion but outpacing the 2015 average outflow of -$475 million.

 

Equity ETFs had net redemptions of -$167 million, outpacing the year-to-date weekly average outflow of -$864 million but trailing the 2015 average inflow of +$2.8 billion. Fixed income ETFs had net outflows of -$1.5 billion, trailing the year-to-date weekly average inflow of +$1.4 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 | Brexit-ing Equity Mutual Funds - ICI2

 

[UNLOCKED] Fund Flow Survey | Brexit-ing Equity Mutual Funds - ICI3

 

[UNLOCKED] Fund Flow Survey | Brexit-ing Equity Mutual Funds - ICI4

 

[UNLOCKED] Fund Flow Survey | Brexit-ing Equity Mutual Funds - ICI5

 

[UNLOCKED] Fund Flow Survey | Brexit-ing Equity Mutual Funds - 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 | Brexit-ing Equity Mutual Funds - ICI12

 

[UNLOCKED] Fund Flow Survey | Brexit-ing Equity Mutual Funds - ICI13

 

[UNLOCKED] Fund Flow Survey | Brexit-ing Equity Mutual Funds - ICI14

 

[UNLOCKED] Fund Flow Survey | Brexit-ing Equity Mutual Funds - ICI15

 

[UNLOCKED] Fund Flow Survey | Brexit-ing Equity Mutual Funds - 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 | Brexit-ing Equity Mutual Funds - ICI7

 

[UNLOCKED] Fund Flow Survey | Brexit-ing Equity Mutual Funds - ICI8



Sector and Asset Class Weekly ETF and Year-to-Date Results: There wasn't a large standout in sector SPDR ETFs this week, but the materials XLB ETF saw the largest percentage outflow of -2% or -$68 million.

 

[UNLOCKED] Fund Flow Survey | Brexit-ing Equity Mutual Funds - 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 | Brexit-ing Equity Mutual Funds - ICI17

 

[UNLOCKED] Fund Flow Survey | Brexit-ing Equity Mutual Funds - ICI18



Net Results:

The net of total equity mutual fund and ETF flows against total bond mutual fund and ETF flows totaled a negative -$6.0 billion spread for the week (-$6.0 billion of total equity outflow net of the -$2 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 -$2.8 billion (negative numbers imply more positive money flow to bonds for the week) with a 52-week high of +$20.2 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 | Brexit-ing Equity Mutual Funds - 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 | Brexit-ing Equity Mutual Funds - ICI11