Preliminary Findings Show Investors Injected A Net $454 Billion Into U.S. Mutual Funds, ETFs In Q1

A third round of stimulus payments, improving COVID-19 vaccine distributions, and talks of a $2.3 trillion infrastructure package pushed the broad-market indices to their fourth consecutive month of plus-side performance. The average equity fund (including ETFs) experienced a 6.31% return for Q1 2021 and a whopping one-year return of 61.39%.

Despite ongoing inflationary concerns, which drove the 10-year Treasury yield up 81 basis points during the first quarter to 1.74%—its highest closing value since January 23, 2020—and President Joe Biden’s plan to raise taxes on corporations and wealthy individuals, investors injected $454 billion into mutual funds and ETFs during Q1, using preliminary numbers.

Fearing an overheated market, a recent rise in coronavirus cases globally, and an increase in market volatility, money market funds (+$185.8 billion) were the main attractor of investors’ assets for the quarter. Nonetheless, investors continued to pad the coffers of long-term assets as well to the tune of $268.2 billion, with taxable bond funds (including ETFs) taking in $133.8 billion, followed by equity funds (+$107.7 billion) and municipal bond funds (+$26.8 billion).

With investors rotating out of the stay-at-home and growth-oriented stocks and into cyclical issues such as financials, energy, and other previously out-of-favor sectors, it wasn’t too surprising that small-cap funds rose to the top of the inflows charts for the quarter, attracting $28.5 billion. The average Lipper Small-Cap Value Fund (+22.12%) posted the second strongest return of all equity classifications for Q1 (outpaced only by Natural Resources Funds, +25.25%).

(Click on image to enlarge)

Sector-financial/banking funds (including ETFs) took the runner-up position, taking in $16.1 billion during Q1, followed by the commodities laden sector-other funds macro-group (+$15.3 billion), sector-technology funds macro-group (+$14.4 billion), and sector-energy funds (+$14.2 billion).

1 2
View single page >> |

All names and marks owned by Thomson Reuters, including "Thomson", "Reuters" and the Kinesis logo are used under license from Thomson Reuters and its affiliated companies.

How did you like this article? Let us know so we can better customize your reading experience.


Leave a comment to automatically be entered into our contest to win a free Echo Show.