U.S. Weekly FundFlows Insight Report: Investors Pad Equity Income, Real Estate Coffers For Funds And ETFs

Investors were overall net purchasers of fund assets (including those of conventional funds and ETFs) for the fifth week in a row. They injected a net $3.7 billion for Refinitiv Lipper’s fund-flows week ended June 9, 2021. Fund investors were net purchasers of taxable bond funds (+$6.8 billion), tax-exempt fixed-income funds (+$2.5 billion), and equity funds (+$717 million) while being net sellers of money market funds (-$6.3 billion) for the week.

Market Wrap-Up

Returns for the broad-based U.S. indices were generally on the plus-side as investors weighed a Goldilocks nonfarm payrolls report while keeping a keen eye on inflationary data and a flattening yield curve during the fund-flows week. Equity markets remained range-bound, hovering near market record highs, while the 10-year Treasury declined 12 basis points (bps) to 1.50% on June 9.

Despite some minor turbulence for stocks, on the domestic side of the equation, the Russell 2000 Price Only Index (+1.27%) witnessed the strongest plus-side returns of the other broadly followed U.S. indices for the fund-flows week. It was followed by the NASDAQ Composite Price Only Index (+1.13%). The Dow Jones Industrial Average Price Only Index (-0.44%) witnessed the only negative returns for the week. Overseas, the Shanghai Composite Price Only Index (-0.24%) mitigated losses better than the other often-followed broad-based global indices, while the FTSE 100 Price Only Index (-0.65%) was the relative laggard.

On Thursday, June 3, 2021, the Dow snapped a five-day winning streak as upbeat economic data pushed Treasury yields higher and weighed on growth- and tech-oriented issues. The May ISM’s services survey rose to 64% from 62.7% in April, and the May private-sector employment figures jumped to 978,000, according to ADP Payroll Services. First-time jobless claims for the week prior dropped to 385,000—the first reading below 400,000 since the beginning of the COVID-19 pandemic. U.S. stocks closed higher on Friday, June 4, after a Goldilocks May nonfarm payrolls report showed the U.S. added 559,000 jobs, missing analysts’ expectations of 671,000. This perhaps is leading investors to believe that the Federal Reserve will continue with its easy money policy, at least in the short run. Interest rates moved lower, which was a tailwind for tech- and growth-focused issues even as investors focused on the ongoing infrastructure spending negotiations.

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