U.S. Weekly FundFlows Insight Report: Q2 Opening Day: Investors Continue Trend Into Short-Term Assets

Investors were overall net purchasers of fund assets (including both conventional funds and ETFs) for the eighth consecutive week as they injected $62.1 billion into the market during Refinitiv Lipper’s fund-flows week ended March 31, 2021.

Money market (+$54.6 billion), taxable bond (+$4.7 billion), equity (+$2.6 billion), and tax-exempt bond (+$161 million) funds all attracted net inflows over the trailing five trading days. The four-week moving average for money market inflows reached its highest level since May 2020.

Market Wrap-Up

Refinitiv Lipper’s fund-flows week ended with weekly gains among all U.S. broad-based indices as well as the Dax 30 and FTSE 100. The small-cap focused Russell 2000 was the largest gainer, posting a 4.04% weekly return. Treasury yields across the yield curve rose over the course of the week, highlighted by the 10-year Treasury yield touching a 14-month high (although still low by historical standards).

On Thursday, March 25, U.S. broad-based indices ended a three-day losing streak as market participants digested good news from the White House and positive employment data. President Joe Biden upped his original goal of 100 million Americans vaccinated by his one-hundredth day in office to 200 million. Initial jobless claims were reported under 700,000 for the first time in the past year and new claims for unemployment decreased to its lowest total since the start of the pandemic.

We also heard from Federal Reserve Chair Jerome Powell who reminded us once again the Fed is utterly devoted to its target of 2% average inflation and that any tightening of monetary policy will be done “gradually over time, and with great transparency.” Broad-based indices continued their positive performance on Friday, March 26, even as U.S. consumer spending data showed a decrease of 1% in February (the largest decline over the last 10 months). Many believe the drop to be temporary as better weather, increased reopenings, and stimulus checks will help to provide a nice spring bounce in this month’s March report.

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