SPY - Stock And Mixed Assets ETFs Attract Record Net Inflows In December While Mutual Funds See Redemptions

2024-01-18 17:27:25 ET

Summary

• For the third month in four, mutual fund investors were net redeemers of fund assets, withdrawing $86.0 billion from conventional funds for December.
• Money market funds (+$18.8 billion) witnessed net inflows for the second consecutive month.
• Fixed income funds (-$12.1 billion) suffered net redemptions for the fifth straight month while investors were net sellers of stock & mixed-assets funds (-$92.6 billion) for the thirty-third month.
• APs were net purchasers of ETFs, injecting a record $129.6 billion for December.
• Fixed income ETFs (+$17.1 billion) witnessed net inflows for the twenty-third straight month while investors were net purchasers of stock & mixed-assets ETFs (+$112.5 billion).

Investors were net sellers of mutual fund assets for the third month in four, withdrawing $86.0 billion from the conventional fund business (excluding ETFs, which are reviewed in the section below).

Stock & mixed-assets funds experienced net outflows for the thirty-third consecutive month (-$92.6 billion, their largest since December 2022). The fixed income funds macro-group—for the fifth month in a row—suffered net redemptions, handing back $12.1 billion. And, in a flight to safety, investors padded the coffers of money market funds, injecting $18.8 billion for December.

For the twentieth consecutive month, ETFs attracted net new money, taking in a record $129.6 billion for December (their largest monthly net inflows since at least September 2009).

Authorized participants (APs—those investors who create and redeem ETF shares) were net purchasers of stock & mixed-assets ETFs—also for the twentieth month in a row—injecting $112.5 billion into equity ETF coffers. For the twenty-third month running, they were net purchasers of bond ETFs—injecting $17.1 billion for the month. APs were net purchasers of all five equity-based ETF macro-classifications, padding the coffers of U.S. Diversified Equity ETFs (+$85.8 billion), World Equity ETFs (+$19.5 billion), Sector Equity ETFs (+$5.3 billion), Alternatives ETFs (+$1.6 billion), and Mixed-Assets ETFs (+$372 million).

In this report, I highlight the December 2023 fund flows results and trends for both ETFs and conventional mutual funds (including variable annuity underlying funds).

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