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After US high-yield retail funds snapped a six-week run of gains in the last week of November, investors returned to the asset class in early December sessions, using exchange-traded funds as an entry point. It pulled in a net $259.3 million for the week through Dec. 7, the top-grossing U.S. weekly for Morningstar journalists, after pouring in $971.5 million last week.
The four-week rolling average was down over the week, although it remained in positive territory, at $1 billion, compared to $1.2 billion last week. That rolling measure has now been in the black for seven consecutive weeks, including a peak reading of $2.9 billion in the week through November. For reference, the rolling average has shown losses since August 23rd – for eight straight readings. Oct. 19, including a weekly average of $2.8 billion in spending in the four weeks through Sept. 14.
The return to inflows in recent weeks puts the 2022 year-to-date net outflow at negative $26.6 billion, a significant improvement from the $42 billion outflow in the first nine months of this year. This year’s redemptions are up from last year’s net inflow of $4 billion, with inflows of $40.8 billion in 2020 and $24.9 billion in 2019. This year’s outflows are lower than the current $29.2 billion in net payments. In the year In 2018, the market is equally wary of downside risks.
ETFs remain the primary portal to changes in investor sentiment. For the last week, investors added $266.4 million to ETF holdings, partly at the expense of $7.1 million from mutual funds. So far in the fourth quarter, investors have poured nearly $15 billion into ETFs, while mutual funds have netted $702 million.
Total investor redemptions remain weighted toward mutual funds ($22.5 billion of the total as of Dec. 7), after the category experienced nearly $9 billion in outflows last year. After nearly $5 billion in ETF inflows last year, ETF outflows this year were $4.1 billion less.
In light of inflows and generally stable markets in the last review period, total net asset value in the funds rose $1.1 billion for the week, reaching a 16-week high of $244.85 billion. That extended fourth-quarter growth to a multiyear low of $220.1 billion on Sept. 28, a gut-wrenching drop from $299 billion earlier this year.
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