The first two months of 2013 marked net flows of $140 billion into stock and bond funds, the best start for the mutual fund industry on record, according to Strategic Insight.
Long-term stock and bond funds attracted $50 billion in February, following January record net intake of $90 billion. Lifecycle mutual funds (target date and target risk) assets grew to $744 billion in February.
“So far in 2013, half of the industry’s record net flows went to international stock and bond funds. Investors in America, and elsewhere, continue to recognize that our world becomes more interconnected, and it is necessary to spread one’s risk and wealth creation aspiration broadly and globally,” stated Avi Nachmany, SI’s Director of Research.
Target date mutual fund assets surpassed $500 billion and have attracted $16 billion of net new flows during the first two months of 2013.
“This year we expect annual net inflows to target date funds to surpass the record set in 2007, of $58 billion,” stated Bridget Bearden, head of SI’s defined contribution research. “The first two months of 2013 have demonstrated how significant the target date opportunity is, particularly as the job market slowly improves and more employers adopt the strategy for their retirement savings plans.”
On the exchange-traded funds front, ETFs attracted $8 billion of net intake in February. Stock-oriented products accounted for $7 billion of ETP inflows (net of $4 billion of gold ETF redemptions), while taxable bond ETPs attracted $1.5 billion of monthly net flows.