In May, stock and bond mutual funds, including exchange-traded funds attracted $56 billion of net inflows bringing total net intake for the first five months to about $350 billion, according to data fromStrategic Insight.
Mutual funds alone drew in $35 billion of net flows in May, driven by nearly equal demand for stock and bond funds. In May, taxable bond funds sustained another month of near $20 billion in net demand, bringing year-to-date net intake to $115 billion. Recently, though, certain bond funds experienced redemptions triggered by expectations of rising interest rates and NAV losses for some bond funds.
Some bond funds and bond investment strategies would continue to experienced periodic redemptions as interest rate expectations are reset in the coming years, stated Avi Nachmany, Strategic Insights Director of Research.
Yet, the search for investment risk mitigation through income vehicles is a lasting trend driven by demographics and a semi-permanent sense of investment anxiety.
Exchange-traded products (including exchange-traded notes) attracted $21 billion of net intake in May, nearly triple the prior months net intake. Stock-oriented products accounted for $17 billion of ETP inflows (inflows elsewhere were matched by net redemption among Gold and emerging market ETFs), while taxable bond ETPs attracted $4 billion of monthly net flows.