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Investors seek to replicate rather than outperform S&P 500

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Investors seek to replicate rather than outperform S&P 500

Todd Rosenbluth is directorof exchange-traded fund and mutual fund research at S&P Global MarketIntelligence. The S&P Global Market Intelligence rankings for ETFs andmutual funds, available through MarketScope Advisor, are quantitatively derivedand based on performance, risks, costs and a qualitative analysis of theunderlying holdings.

With$4.5 billion in net withdrawals in the seven-day period ended July 6, investorsextended the weekly consecutive streak for domestic equity mutual funds to 17 weeksaccording to Thomson Reuters Lipper.

Outflowsfrom the actively managed universe of funds occurred even as the averageoffering rose 1.15% in the days following the Brexitvote. However, continuing a trend across various , asset managersoffering exchange-traded funds experienced inflows.

Large-capsmutual funds, which typically seek to outperform the S&P 500 index, shed$3.5 billion in assets, while mid-cap products that seek to outpace the S&P400 index or the Russell MidCap index, had more modest outflows of $395million.

WhileLipper did not provide details on which companies experienced outflows in thecategories, Fidelity Contrafund (FCNTX) and American Funds Growth Fund ofAmerica (AGTHX) are the actively managed large-cap funds with the most assetsunder management. Meanwhile, Fidelity Low Priced (FLPSX) and T. Rowe PriceMid-Cap Growth (RPMGX) were the biggest mid-cap offerings.

Domesticequity ETFs, on the other hand, pulled in $6.0 billion of new money in theseven-day period ended July 6. SSgAFunds Management Inc.'s SPDR S&P 500 (SPY) and 's iShares S&P 500(IVV) gathered $4.6 billion and $654 million, respectively as investors soughtout passive large-cap products.

Taxablebond funds reported net outflows for the second consecutive week. The category's $1.0 billion withdrawalwas highest for corporate investment-grade bond funds as investors favoredhigh-yield funds that incurred greater credit risk.

Forthe 40th consecutive week municipal bond mutual funds witnessed net inflows;the product group attracted $540 million of new money this past week. Theinvestment category has been consistently in vogue in 2016, unlike taxable bondand domestic equity products.