Investors Prefer Passive Equity Strategies in January

Net flows to stock and bond funds totaled $30.5 billion in January, led by a $14.9 billion net intake to Taxable Bond funds, according to Strategic Insight (SI), an Asset International company.

SI notes that January aggregates are distorted due to $26 billion of redemptions from the SPDR S&P 500 ETF (exchange-traded fund); excluding that outflow, industry flows to stock and bond funds neared $60 billion in January.

U.S. Equity funds slipped into outflows during a volatile month, losing $2.7 billion. U.S. Equity index funds took in $17.6 billion; however, active funds had outflows of $6.8 billion, and U.S. Equity exchange-traded products posted outflows of $13.6 billion in January.

Actively managed International Equity funds attracted $3.4 billion of net new investment in January, while index funds and exchange-traded funds saw inflows of $4.1 billion and $5.4 billion, respectively.

Tax-Free Bond funds saw inflows of $5.5 billion, lifting total bond fund intake to $20.4 billion in January. Money Market funds posted a net outflow of $47.1 billion.

Sectors with highest January flows among actively managed Equity mutual funds included Health ($2.0 billion), International Total Return ($1.4 billion), and Balanced ($1.2 billion). Top Bond fund flow objectives during the month included Corporate Bond General ($6.9 billion), Corporate High Quality ($3.4 billion) and Corporate High Yield ($3.3 billion).

More about Strategic Insight is at www.sionline.com.