U.S. Weekly FundFlows Insight Report: Investors Sour On Equity Funds As APs Pump Money Into Equity And Bond ETFs

For the fifth week running, investors were overall net purchasers of fund assets (including those of conventional funds and ETFs), injecting $11.7 billion for Lipper’s fund-flows week ended January 22, 2020. Fund investors were net purchasers of taxable fixed income funds (+$8.4 billion), municipal bond funds (+$2.0 billion), money market funds (+$1.2 billion), and equity funds (+$69 million) this week.

Market Wrap-Up

For the Martin Luther King Jr., the day-shortened fund-flows week ended January 22, 2020, investors cheered a bevy of positive news which included the signing of the Sino-American phase-one trade agreement; Congress passing a revised trade deal between the U.S., Canada, and Mexico; a better-than-expected start to the Q4 earnings season; and strong economic reports. During the fund-flows week, all three broadly followed U.S. indices set new record closes at various times. The NASDAQ Composite Price Only Index (+1.35%) 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 (+0.99%), while the Russell 2000 Price Only Index (+0.12%) was the relative laggard. Overseas, the Nikkei 225 Price Only Index (+0.56%) posted the only plus-side returns of the often-followed broad-based global indices, while the Shanghai Composite Price Only Index (-1.15%) suffered the largest declines.

On Thursday, January 16, all three major U.S. stock market indices set new record closes on the day following the signing of a trade agreement between the U.S. and China, and after the Senate approved a trade deal between the U.S., Mexico, and Canada. Markets also got a shot in the arm after investors learned Morgan Stanley reported Q4 earnings and sales that beat analysts’ expectations. On Friday, January 17, stocks once again closed at record highs after sentiment was boosted by a report that the U.S. December housing starts rose 16.9%, its fastest pace since 2006. Investors appeared to shrug off the news that December U.S. industrial production fell by 0.3% and that capacity utilization fell to 77%.

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