Investors Retreat from Fund Assets, Exiting Stocks and Money Markets

In a recent week concluding on February 21, market dynamics observed a continued pattern with investors withdrawing their assets from funds, marking it as the second occurrence in three weeks. The total capital pulled out from the fund market, encompassing both conventional funds and exchange traded funds (ETFs), amounted to a substantial $11.6 billion.

Money Market Outflows Lead the Retreat

The most prominent reduction was seen in money market funds, which witnessed an exodus of approximately $9.6 billion. Equity funds were not spared either, as they faced withdrawals totaling $3.5 billion. Not far behind, mixed-assets funds returned $685 million to investors, and commodity funds saw outflows of $501 million. Conversely, certain sectors managed to attract capital; fixed income funds led with an inflow of $2.6 billion.

Select ETFs Buck the Trend

Despite the general pullback, some funds bucked the trend and attracted notable inflows. Specific equity based ETFs such as the iShares Core S&P 500 ETF (IVV) and the iShares Russell 2000 ETF (IWM) managed to draw in $2.3 billion and $819 million respectively. When it comes to the fixed income space, the iShares Bitcoin Trust (IBIT) and the iShares Core U.S. Aggregate Bond ETF (AGG) were at the forefront, garnering $899 million and $543 million in net new money correspondingly.

Outflows Hit Flagship ETFs

On the flip side, certain fund giants did not fare as well. The widely tracked SPDR S&P 500 ETF Trust (SPY) and the Invesco QQQ Trust Series 1 (QQQ) both experienced substantial outflows, each seeing capital retraction of $1.6 billion. Within the realm of fixed income ETFs, the iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD) and the iShares iBoxx $ High Yield Corporate Bond ETF (HYG) recorded the largest outflows at $1.8 billion and $815 million respectively.

The current shift in investor sentiment and the subsequent fund flow patterns were highlighted in the latest Refinitiv Lipper fund flow report, signaling a cautious approach being adopted by investors in the fund market.

Investors, Outflows, ETFs