active fund exodus – The exodus from actively managed equity mutual funds continued last week. According to Bank of America’s weekly ‘Flow Show’ report, there were $7.4 billion of outflows from equities funds last month. Of this total, $4.8 billion was withdrawn from equity mutual funds, and $2.5 billion was withdrawn from equity ETFs. The total outflow was the largest seen in 12 weeks and brings the year-to-date outflow from both equity mutual funds and ETFs to $138.3 billion or 1.8% of the industry’s assets under management. Long only mutual funds have seen a total of $202.1 billion leave year-to-date 3.8% of assets under management. Equity ETFs have seen inflows of $63.8 billion year-to-date, 2.9% of industry assets under management.

Active fund outflows continue as commodities benefit

Emerging market equity funds reported their first outflow in 12 weeks last week, $0.1 billion left the sector. Interestingly, while emerging market assets have attracted billions of dollars from investors so far this year, investors have selected the countries they want to buy carefully. For example, while emerging market equity funds have, on the whole, reported inflows, Chinese equity funds have seen outflows of $8.2 billion year-to-date. Similarly, Indian equity funds have reported outflows of $1.5 billion year-to-date and Russian equity funds have seen outflows of $600 million. The only BRIC nation with positive equity fund flows according to Bank of America is Brazil. Year-to-date $212 million has flowed into equity funds focused on Brazil.

For the 33rd week in a row, European equity funds saw outflows. $1.8 billion left European equity funds last week. There were $2.4 billion worth of inflows into Japanese equity funds, the most robust inflows since the beginning of 2016.

Outside the equity space bond funds saw $3.8 billion of inflows. Bond funds have attracted funds in 11 of the past 12 weeks, and year-to-date bond funds have taken on $157.9 billion of assets, which is equivalent to 4.6% of industry assets under management.

Emerging market debt funds were the biggest winner in the fixed income space attracting $1.5 billion last week, marking 12 straight weeks of inflows. Investment-grade bond funds attracted $2.8 billion of inflows; there have been inflows into these funds in 28 of the past 29 weeks. Government and Treasury bond funds reported their 11th straight week of outflows. $0.3 billion left the sector last week. And finally, in the fixed income space, high yield bond funds reported their second consecutive week of outflows last week. Outflows from high yield funds amounted to $1.2 billion

Commodity focused funds reported $0.5 billion of inflows last week. Year-to-date commodity funds of seen $32.7 billion of inflows, which is around 26.1% of industry assets under management.

However, overall it is a bad picture for active fund flows as it looks like Bogle keeps winning (at least for now).

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