Mutual Fund Flows for March

Flows into long-term funds rose to $64 billion in March, as a result of an uptick in flows into both stock and bond programs. Bond funds ($40 billion) again drew a majority of the long-term fund flows, as overall still cautious investors sought alternatives to money market funds and deposit accounts in a near-zero cash-yield environment. US equity funds (+5.31%) outperformed international equity funds (+1.99%) over the first quarter helped by a strengthening US dollar, and saw a slight improvement in flows in March, to $12 billion; investor demand for global diversification however persisted, as international equity funds drew an equivalent amount over the month, bringing their total net intake in the first quarter to nearly $30 billion.

Mutual Fund Flows for February

Here is the February summary of mutual fund flows from Strategic Insight...

Long-term funds added $34 billion in February, raising year-to-date net flows to nearly $80 billion. Bond funds continued to dominate the long-term fund net intake, pulling in $27 billion in February driven by persistent demand for income by safety-seeking investors in a near-zero cash-yield environment, a trend we expect to persevere for a while. Concerns about European sovereign debt and fears that the global economic recovery would prove to be disappointing led investors to curtail their net new commitments to international/global equity funds in February, while flows into US equity funds remained minimal as continued economic uncertainty fed into investor caution.

Mutual Fund Flows For January

Here is the January summary of mutual fund flows from Strategic Insight...

Bond fund flows continued at a robust pace in January ($30 billion), driven by continued strong demand for income in a near-zero cash yield environment. The month also saw a slight pickup in demand for actively managed equity funds, which came in the face of a fall in equity market indices—the average equity fund experienced an NAV decline of 3.8% (asset-weighted average) in January. Flows into active international/global equity funds neared $10 billion (the highest volume since May 2008), and active US equity/hybrid funds saw positive net inflows for the first time since June 2009. In total, equity funds, active and passive, garnered $15 billion in January.

Bond Funds Still Winning Favor

Strategic Insight recently posted their summary of mutual fund flows for December...

Bond funds saw flows moderating to $29 billion in December, but still ended up establishing an all-time record for the full year with an almost $400 billion net intake. In contrast, flows into equity funds remained subdued despite the ongoing global stock market revival due to investor ambivalence about its sustainability, and continuing low risk appetites overall. Within the equity fund area, the recent dichotomy between internationally-investing and US-focused programs persisted, with the former continuing to draw modest inflows (helped by investor interest in boosting emerging market allocations in their portfolios), and the latter suffering small net outflows. December saw international equity funds garnering $8 billion.

Still bond mutual funds over all others

Strategic Insight is reporting that November mutual fund flows are still moving into income paying bond mutual funds, probably leaving maturing CD's. Here is their summary...

Flows into bond funds in November, although somewhat off from the blistering pace of the prior three months, were very robust at $38 billion. Driven by continued strong demand for income in a near-zero cash yield environment, bond fund flows have reached extraordinary levels in 2009. In contrast, notwithstanding a 4.8% rise in NAVs on average (asset-weighted) in November, stock/hybrid funds received only small inflows over the month, because of continued concerns about the sustainability of the global economic and stock market revival.