Fund Flows And The S&P 500


Fund Flows And The S&P 500 by Jennifer Thomson, Gavekal Capital

Total assets in Commodity-focused mutual funds declined again in June:

This seems reasonable enough, given the decimation of the commodity complex:

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Fund Flows

A closer look at the one month difference in total net assets, by sector, reveals that just two groups had positive flows last month– Health Care and Financials:

Fund Flows

A diffusion index constructed of the monthly changes in each of the sectors (+1 for a gain, and -1 for a decline) reveals that month-over-month changes were about evenly matched in July with a score of 0.  This is an improvement over the last four months (March-June) in which declines in fund assets were the dominant trend in flows.  The S&P 500 held up well over this time period, in contrast to previous instances in which the diffusion index fell below zero.  As we can see in the chart below, such outflows have typically preceded or coincided with stock market declines:

Fund Flows