Equity mutual funds and exchange-traded funds reported net redemptions of $4.1 billion, continuing their roller coaster ride over the past eight weeks, according to data provided by Lipper analyst Matthew Lemieux.
After an early run-up in equities the previous week, investors held the markets steady as they anticipated the announcement of further action from both the FOMC and ECB, according to Lemieux.
“The news out of the Fed was expected by many as they did not signal any additional stimulus or extension of the low-rate target past 2014. Across the Atlantic, Mario Draghi failed to inspire investors as what was previously taken as a signal to buy government bonds fell flat with no additional actions taken—global markets followed suit with most ending the day in the red,” he wrote.
But as one day closes another begins and with better than expected U.S. nonfarm payrolls coming in at 163k investors were quick to respond. The S&P 500 jumped 1.9% on Friday alone and added another 7 bps for the week ended Wednesday—above the 1,400 mark for the first time in three months.
Despite this positive move in the markets equity mutual funds and ETFs reported net redemptions of $4.1 billion, continuing their roller coaster ride over the past eight weeks. Once again SPDR S&P 500 (SPY) had a heavy influence over the aggregate numbers pushing out roughly $3.9 billion of the total. Equity mutual funds were able to eke out a net inflow of $133 million and although relatively flat it was a large improvement over the roughly $5 billion in net redemptions experienced over the previous two weeks. Taxable bond funds posted their fifth consecutive week of inflows at $5.2 billion as investors continued to allocate cash to both corporate investment grade, up $1.6 billion, and high yield products, up $809 million. Municipal bond funds also ended the period strongly with net inflows of $1.1 billion—the group’s seventeenth week of consecutive inflows. Money markets ended the week with net sales of $11.9 billion.