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Strategic Insight Tracks Investor Net Inflows of $46 Billion in February 2012

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An uptick in confidence amid positive indicators on the economy meant that investors cautiously put an estimated $46 billion in net inflows into stock and bond mutual funds in the US in February 2012, a new report discloses.

Strategic Insight (New York, N.Y.; Stamford, Conn.; Boston, Mass.) published this finding in a new survey of net flows into stocks and mutual funds. The company is a business intelligence provider to the mutual fund industry.

The $46 billion recorded in February, the report says, represents an increase from January, when investors put net $37 billion in flows from long-term funds. February’s results were the best monthly net inflows for long-term mutual funds since March 2010, when long-term funds (excluding ETFs and VA funds) saw $49 billion in net inflows, the report finds.

In February, domestic equity funds saw net inflows of nearly $4 billion, during a month when the average US equity fund gained 4% on an asset-weighted basis. The net inflows to domestic equity mutual funds in both January and February (totaling roughly $5 billion) was the first time US equity funds enjoyed net inflows in two straight months since March-April 2011 (when US equity funds drew a combined $6 billion in net inflows).

Illustrating investors’ caution, February’s US equity inflows were led by equity income funds, with nearly $3 billion of net inflows.

 “Memories of extreme volatility are fading, albeit very slowly, as US mutual fund investors are tiptoeing back into riskier assets,”  says Avi Nachmany, SI’s Director of Research. “That’s why we have seen more fund shareholders choose to participate in financial markets via bond funds.

“Many uncertainties continue to hover over the markets, including the Eurozone situation and the sustainability of US job growth,” he adds. “Nevertheless, while caution remains the overarching mood, encouraging flows trends to stock funds are evidenced, and such may accelerate in the coming months.”

International and global equity funds saw net inflows of more than $6 billion. The leading categories were emerging markets equity funds ($3 billion in net inflows), which gained an average 5.8% in February on an asset-weighted basis, and global asset allocation funds ($2 billion), which gained on average an asset-weighted 3.5% in the month. February was the second straight month where these two categories led the way in international/global equity fund flows.

Separately, Strategic Insight finds that US Exchange-Traded Funds (ETFs) enjoyed $15 billion in net inflows in February 2012. That brought total ETF net inflows to $43 billion for the first two months of 2012 – more than double the $18 billion in net inflows to ETFs in the first two months of 2011, and a pace that could result in the sixth straight year of $100 billion or more in net inflows to US ETFs. 

(New York, N.Y.; Stamford, Conn.; Boston, Mass.) reports


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