ETF, Mutual Fund Investors Inject Taxable Fixed Income Funds With $8.6 Billion In Cash

Investors were overall net purchasers of fund assets (including those of conventional funds and ETFs) for the eleventh week in 12. They injected a net $29.1 billion for Refinitiv Lipper’s fund-flows week ended April 21, 2021, with the lion’s share attributable to flows into short-term assets. Fund investors padded the coffers of money market funds (+$17.0 billion), taxable bond funds (+$8.6 billion), tax-exempt fixed-income funds (+$1.9 billion), and equity funds (+$1.6 billion) for the week.

Market Wrap-Up

For the fund-flows week, returns for the broad-based U.S. indices were mixed as investors took their foot off the gas pedal. They were wrestling with concerns over an increase in global COVID-19 cases and the good news of a relatively strong beginning to the Q1 corporate earnings seasons. In spite of any concerns, both the DJIA and S&P 500 hit fresh new record highs during the week.

On the domestic side of the equation, the Dow Jones Industrial Average Price Only Index (+1.20%) witnessed the strongest returns of the other broadly followed U.S. indices for the fund-flows week, followed by the S&P 500 Price Only Index (+1.18%). The Russell 2000 Price Only Index (-0.36%) suffered the largest declines for the week. Overseas, the Shanghai Composite Price Only Index (+2.24%) posted the strongest returns of the other often-followed broad-based global indices, while the Nikkei 225 Price Only Index (-3.00%) witnessed the largest declines after Japanese officials considered ordering a state of emergency in Osaka and Tokyo due to a surge in coronavirus cases.

On Thursday, April 15, 2021, the Dow and S&P 500 closed at record highs after the government reported March retail sales leapt 9.8%, beating analyst expectations, and weekly jobless claims declined to a pandemic-level low of 576,000 from 769,000 in the prior week. Stocks got an additional boost from a strong beginning in Q1 corporate earnings reports and a decline in the 10-year Treasury yield to 1.56%—an eight basis-point decline from Wednesday’s close. U.S. stocks witnessed another round of record closes on Friday, April 16, with the Dow and S&P both extending their weekly winning streak to the fourth consecutive week. The nation’s biggest banks reported strong Q1 earnings, and while capacity utilization rose for the month, it remained under the inflation tipping point. Near month crude oil futures fell 33 cents to settle at $66.13/barrel (bbl).

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