XLK - U.S. Fund Investors Turn To ETFs And Money Market Funds In November

2023-12-18 18:26:36 ET

Summary

• For the first month in three, mutual fund investors were net purchasers of fund assets, injecting $102.2 billion into conventional funds for November.
• Money market funds (+$188.1 billion) witnessed net inflows for the sixth month in seven.
• Fixed income funds (-$17.0 billion) suffered net redemptions for the fourth consecutive month while investors were net sellers of stock & mixed-assets funds (-$68.9 billion) for the thirty-second straight month.
• APs were net purchasers of ETFs, injecting $100.4 billion for November.
• Fixed income ETFs (+$32.2 billion) witnessed net inflows for the twenty-second straight month while investors were net purchasers of stock & mixed-assets ETFs (+$68.3 billion).

Investors were net purchasers of mutual fund assets for the first month in three, injecting $102.2 billion into the conventional fund business (excluding ETFs, which are reviewed in the section below). However, the headline number is misleading.

Stock & mixed-assets funds experienced net outflows for the thirty-second consecutive month (-$68.9 billion, its largest since December 2022). The fixed income funds macro-group—for the fourth month in a row—suffered net redemptions, handing back $17.0 billion. And, in a flight to safety, investors padded the coffers of money market funds, injecting $188.1 billion for November.

For the nineteenth consecutive month, ETFs attracted net new money, taking in a whopping $100.4 billion for November (their largest monthly net inflows since December 2021).

Authorized participants (APs—those investors who create and redeem ETF shares) were net purchasers of stock & mixed-assets ETFs—also for the nineteenth month in a row—injecting $68.3 billion into equity ETF coffers. For the twenty-second month running, they were net purchasers of bond ETFs—injecting $32.2 billion for the month (their largest monthly net inflows since May 2022). APs were net purchasers of all five equity-based ETF macro-classifications, padding the coffers of U.S. Diversified Equity ETFs (+$57.7 billion), Sector Equity ETFs (+$4.7 billion), World Equity ETFs (+$4.5 billion), Alternatives ETFs (+$1.3 billion), and Mixed-Assets ETFs (+$56 million).

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

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