U.S. Weekly FundFlows Insight Report: APs And Fund Investors Turn To Bond Funds During The Week

For the first week in 12, investors were overall net redeemers of fund assets (including those of conventional funds and ETFs), withdrawing $13.7 billion for Lipper’s fund-flows week ended November 20, 2019. Once again, fund investors were net purchasers of taxable fixed income funds (+$12.4 billion, their largest weekly net inflows since February 4, 2015) and municipal bond funds (+$2.0 billion). However, they were net redeemers of money market funds (-$25.3 billion, their largest weekly outflows since April 17, 2019) and equity funds (-$2.8 billion) this week.

Market Wrap-Up

For the fund-flows week ended November 20, 2019, investors remained generally hopeful over a phase-one Sino-American trade agreement. This optimism contrasted with news about mixed economic news and confirmation from the Federal Reserve’s October Federal Open Market Committee meeting minutes that more interest rate cuts are unlikely in the near term. During the fund-flows week, all three broadly followed U.S. indices witnessed record closes in anticipation of a China/U.S. partial trade agreement being passed this year. The NASDAQ Composite Price Only Index (+0.53%) posted the strongest returns of the broadly followed U.S indices for the fund-flows week, followed by the S&P 500 Price Only Index (+0.47%), while the Dow Jones Industrial Average Price Only Index (+0.13%) was the relative laggard. Overseas, the Xetra DAX Total Return Index (-0.03%) mitigated losses better than the other often followed broad-based global indices. The FTSE 100 Price Only Index (-0.65%) and the Nikkei 225 Price Only Index (-0.65%) posted the largest declines of the subgroup for the fund-flows week.

The S&P 500 Index closed at a record high on Thursday, November 14, as investors cheered an imminent U.S./China trade deal. However, worries over international trade uncertainty, Hong Kong protests, and Brexit weighed on the other indices. First-time unemployment claims rose to a nearly five-month high for the week ended November 9. On Friday, November 15, the Dow closed above the 28,000 mark for the first time and the S&P 500 rallied for a sixth consecutive week as investors remained hopeful that the U.S./China trade deal will justify recent market highs. While U.S. October industrial output declined by the most in 17 months—worse than analyst expectations—October retail sales rose 0.3%, beating expectations.

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