U.S. Weekly FundFlows Insight Report: Investors Withdraw $7.2 Billion From Equity Funds And ETFs During The Fund-Flows Week

For the second week in three, investors were overall net purchasers of fund assets (including those of conventional funds and ETFs), injecting $3.4 billion for Refinitiv Lipper’s fund-flows week ended August 5, 2020. Fund investors were net purchasers of taxable fixed income funds (+$9.2 billion) and municipal bond funds (+$1.6 billion) while being net redeemers of equity funds (-$7.2 billion) and money market funds (-$216 million) this week.

Market Wrap-Up

Investors pushed markets higher during the fund-flows week, supported by hopes for an agreement by Congress to fund another fiscal relief package, on better-than-expected Q2 corporate earnings reports, and economic data that surprised to the upside.

On the domestic side of the equation, the Nasdaq Composite Price Only Index (+4.32%) and the Russell 2000 Price Only Index (+3.04%) witnessed the strongest returns for the fund-flows week of the broadly followed U.S. indices. Overseas, the Shanghai Composite Price Only Index (+3.22%) chalked up the largest plus-side return of the often-followed broad-based global indices, while the Xetra DAX Total Return Index (-0.36%) witnessed the only decline.

On Thursday, July 30, the Dow and the S&P 500 finished the day on the downside, while the Nasdaq clawed its way back to another round in the black as investors grappled with news of Q2 GDP coming in at negative 32.9% (its worst reading on record), first-time unemployment claims rose for the prior week, and there were no signs that lawmakers were nearing agreement on another coronavirus relief package. However, the Federal Reserve Board left interest rates unchanged and committed to providing support to the economy.

However, on Friday, July 31, stocks closed modestly higher as investors weighed the conflicting signals of several big tech stocks reporting strong Q2 earnings reports, while energy stocks took it on the chin after posting poor second-quarter results. Investors appeared somewhat hesitant after learning that July U.S. consumer sentiment slipped to 72.5 after registering a 73.2 reading for June and that the U.S. saw record COVID-19 deaths in Arizona, Florida, and Texas. The 10-year Treasury yield declined to 0.55% (its lowest closing value since March 10, 2020).

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