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May 20, 2020 at 03:07 PM
Mutual fund and ETF flows turned positive in April, reversing a historic decline in March, which saw the biggest decline since at least 1993, according to Morningstar. Investors, however, remained skittish in April, favoring money market funds above all others, as they did in March, and withdrawing funds from stock funds.
Net inflows into money market funds reached $388 billion, a little more than half the net inflows in March, trouncing inflows into any other fund category.
U.S. equity funds saw outflows of $18.1 billion compared with net inflows of $10.5 billion in March. About two-thirds of April outflows were from the Vanguard Total Stock Market Index (VTSAX).
Overall fund flows turned positive, with an estimated $17.5 billion flowing into all long-term funds, excluding money market funds, compared with the $326 billion outflows in March.
(Related: Fund Outflows in March Topped Outflows in October 2008)
In another reversal, taxable bond funds saw net inflows of $36.6 billion in April, versus outflows of $240.3 billion in March.
High-yield bond funds led the bond fund category for net inflows, collecting $10.7 billion, the most in more than 21 years of data, as “investors’ interest in risk-taking appeared to revive,” according to Morningstar.
Large-cap blend funds, which combine growth and value stocks, and large-cap value funds led outflows among equity funds, as $3.3 billion left each category.
International equity funds, however, suffered the biggest withdrawals among all fund categories — $20 billion, close to 60% more than the previous month.
Sector equity funds, in contrast, experienced near-record inflows of $16 billion, led by health care funds, which accounted for about half those inflows, followed by technology funds.
On the flip side, Dimensional Fund Advisors led on net outflows, losing $3.1 billion, followed by T. Rowe Price, with $2.4 billion exiting, then Invesco, $1.7 billion.