September 13, 2010

ReFlow FLIX Index Shows Mutual Fund Asset Flows Dropped in July

Index down 13.7% from June, but positive flows due more to decline in redemptions than higher sales

ReFlow Management Co.'s FLIX Index, a monthly indicator of asset flow volatility for long-term mutual funds, declined to 492 in July from a 573 reading in June, continuing its retreat from the peak levels seen in May.

The July FLIX reading represented a 13.7% drop from June, which in turn represented a 13.5% drop from May. Lower gross flow volumes for both equity and taxable bond funds pushed the FLIX below its 12-month trailing average of 535.

"Still, flow volatility remained higher than levels typical before the financial crisis," according to a ReFlow news release.

The FLIX flow barometer showed July sales outpacing redemptions by 14.7% for all long-term funds. Among taxable bond funds, monthly sales were 64% higher than redemptions, although those positive net flows were due more to declining redemptions than to robust sales. Equity fund net flows were negative, with redemptions outweighing sales by 8.5%. While equity fund redemptions were lower than in five of the last months, new fund sales dropped even more.

FLIX measures gross flows of long-term mutual funds as a percentage of average assets under management. It is based on ReFlow Management's analysis of data published by the Investment Company Institute (ICI) in its regular publication, Monthly Trends in Mutual Fund Investing.

Current FLIX Index data can be downloaded from www.reflow.com/flix/monthly.pdf.

Read about the FLIX index's performance in June from the archives of InvestmentAdvisor.com.

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