[UNLOCKED] Fund Flow Survey | The Hits Keep Coming

Editor's Note: Below is a complimentary research note originally published August 11, 2016 by our Financials team. If you would like more info on how you can access our institutional research please email sales@hedgeye.com.

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Investment Company Institute Mutual Fund Data and ETF Money Flow:

In the past four weeks, domestic equity funds have had their four largest withdrawals so far in 2016, including a -$7.4 billion in the most recent 5-day period ending August 3rd. Additionally, with the weak 1.2% GDP growth reading released on July 29th, all other active equity categories also experienced redemptions, contributing to total equity mutual fund flows of -$9.0 billion. Widespread outflows from equity mutual funds has become commonplace recently, especially with international equity, once a consistent gainer, only experiencing positive flows in 24 out of the last 52 weeks. Meanwhile, total bond mutual funds had their largest inflow YTD of +$8.0 billion as investors sought safety. In ETFs, equity fund flows managed to break positive with +$910 million in subscriptions. Bond ETF flows were somewhat weaker but still positive at +$474 million. Finally, investors defensively shored up +$24 billion of cash in money funds.

 

In the most recent 5-day period ending August 3rd, total equity mutual funds put up net outflows of -$9.0 billion, trailing the year-to-date weekly average outflow of -$3.8 billion and the 2015 average outflow of -$1.6 billion.

 

Fixed income mutual funds put up net inflows of +$8.0 billion, outpacing the year-to-date weekly average inflow of +$2.8 billion and the 2015 average outflow of -$475 million.

 

Equity ETFs had net subscriptions of +$910 million, outpacing the year-to-date weekly average outflow of -$136 million but trailing the 2015 average inflow of +$2.8 billion. Fixed income ETFs had net inflows of +$474 million, trailing the year-to-date weekly average inflow of +$1.8 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:

 

 

 

 

 

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.

 

 

 

 

 

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:

 

 

Sector and Asset Class Weekly ETF and Year-to-Date Results: In Sector SPDR callouts, investors pulled -3% or -$251 million from the long duration treasury TLT ETF.

 

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.

 

 

Net Results:

The net of total equity mutual fund and ETF flows against total bond mutual fund and ETF flows totaled a negative -$16.5 billion spread for the week (-$8.1 billion of total equity outflow net of the +$8.5 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 -$4.4 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.)

 

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: