Investors pumped $50.7 billion into money-market funds in the third quarter, according to the estimates provided by Lipper. However, they also showed a diverse appetite for both fixed-income and equity products.
Third-quarter estimated fund flows into traditional mutual funds (excluding money markets) were $25.5 billion, with investors focusing on taxable fixed-income products ($21.1 billion) and municipal debt ($5.8 billion). ETF inflows hit $31.8 billion and moved mainly into equity products to the tune of $28.1 billion.
In Lipper’s analysis of the Q3 winners and losers, released in early October, the group says institutional U.S. Treasury money-market funds drew nearly $29 billion of inflows, while international U.S. government money-markets brought in about $19 billion. Core-bond funds had inflows of $10.5 billion. Other leading categories with inflows were international multi-cap core ($8.6 billion) and multi-cap core ($7 billion).
Losing categories for the past three months included high yield (–$17.4 billion), loan participation (–$8.4 billion), large-cap growth (–$7 billion), multi-cap growth (–$5 billion) and small-cap growth (–$4.5 billion).
As for performance, equity funds fell 2.92% in the third quarter—their first quarterly loss over the past nine three-month periods.
U.S. diversified-equity funds dropped 1.95%, and mixed-assets funds fell about 1.71%. Sector-equity funds, though, declined nearly 4%, as world-equity products dipped close to 4.4%. Year to date, equity funds are still up 2.5% through Sept. 30, the research group says.
During the third quarter, Lipper notes, the U.S. dollar moved up almost 5.5% vs. the British pound and some 8.5% compared with the euro. Gold priced dropped nearly 8.5% in the period, while oil fell some 13.5%.
“A light issuance calendar and steady retail inflows helped push muni funds to the top spots in the Q3 performance tables: High-yield muni debt funds, at 2.40%, led all groups,” according to Jeff Tjornhoj, head of research for Lipper-Americas.
Munis would not have risen so high, Thornjoj adds, if Treasuries hadn’t rallied in the middle of the period. “Despite a drop in September, general U.S. Treasury funds still posted a Q3 return of 1.02%,” he said.