Despite Equity Issues Taking It On The Chin, Investors Inject $14.3 Billion Into Equity ETFs

Investors were overall net purchasers of fund assets (including those of conventional funds and ETFs) for the seventh consecutive week. They injected $74.7 billion for Refinitiv Lipper’s fund-flows week ended March 24, 2021 (their largest weekly sum since April 29, 2020), with the lion’s share attributable to flows into short-term assets. Fund investors padded the coffers of money market funds (+$59.3 billion), equity funds (+$10.9 billion), taxable bond funds (+$3.9 billion), and tax-exempt fixed-income funds (+$592 million) for the week.

Market Wrap-Up

The broad-based U.S. indices, from a performance perspective, took it on the chin for fund-flows week as investors appeared to unwind some of their recent rotation wins, several European countries witnessed a third round of COVID-19 lockdowns, and the Federal Reserve said it would not extend the temporary capital-requirement relief rules for banks.

On the domestic side of the equation, the Russell 2000 Price Only Index (-8.65%) suffered the largest market losses of the other broadly followed U.S. indices for the fund-flows week, bettered by the NASDAQ Composite Price Only Index (-4.16%). The Dow Jones Industrial Average Price Only Index (-1.80%) did the best job mitigating losses for the week. Overseas, the Xetra DAX Total Return Index (-0.53%) posted the strongest relative returns of the other often-followed broad-based global indices, while the Nikkei 225 Price Only Index (-4.69%) witnessed the largest declines.

On Thursday, March 18, 2021, stocks finished markedly lower, with the Nasdaq declining 3% on the day as the 10-year Treasury yield rose eight basis points (bps) to 1.71%, and European countries contended with a third round of COVID-19 shutdowns. This weighed on near-month crude oil futures, with the U.S. benchmark declining 7% to $60 per barrel (bbl) and gold edging higher. U.S. stocks suffered another round of declines on Friday, March 19, after investors learned the Fed will not extend temporary relief from year-long bank capital-requirement rules—pressuring financial issues—and the 10-year Treasury yield rose an additional three bps to 1.74%. Oil gained back some of the losses from the day before, settling at $61.42/bbl.

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