For the first month in five, investors were net redeemers of fund assets, withdrawing a close to $42 billion from the conventional funds business, according to a Lipper report released early Wednesday.
Flows from stock and mixed-equity funds dropped by nearly $20 billion, while some $43 billion moved out of money-market funds. Bond funds, on the other hand, gathered more than $21 billion in assets last month.
"For the second consecutive month, investors were net redeemers of [U.S. diversified equity, or USDE] funds in June, pulling out $21.9 billion," said Tom Roseen, head of research services for Lipper, in the recent report, entitled "Nervous Investors Redeem $41.8 Billion from the Conventional Funds Business in June."
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Large-cap funds lost about $11 billion, experiencing their 25th consecutive month of outflows. Multi-cap core funds, though, had inflows of nearly $1 billion, attracting the largest inflows of the macro-group.
World-equity funds grew by $4 billion with institutional investors injecting net new money into this category. World-equity funds added $200 million.
Bond funds drew more than $21 billion in net purchases, but investors unloaded about $3 billion of loaded funds.
The Dow Jones Industrial Average lost 1.24% in June, notes Roseen, losing ground for the second month in a row, and the NASDAQ dropped by 1.24%.
In fixed income, Treasury bonds with maturities of less than one year saw the yield curve shift down, while for the longer-dated maturities, yields rose between 0 and 18 basis points. The benchmark ten-year Treasury yield finished the month 13 basis points higher at 3.18% The yield on the two-year bond remained the same for the month at 0.45%.
Other Fund Groups
Sector equity funds witnessed net redemptions of $1.5 billion), with science & technology Funds losing $0.5 billion). Commodities general funds added $0.4 billion for June.
Of the 21 classifications in the sector equity macro-group, 11 had net outflows.
Groups with inflows included health/biotechnology funds ($0.3 billion) and utility funds ($0.2 billion).
For the thirteenth consecutive month, Lipper analysts say, mixed-equity funds saw net inflows, drawing in $3.3 billion, which was the largest inflow of Lipper's four major equity macro-groups for the third consecutive month.
In June, flexible-portfolio funds and absolute-return funds grew by some $1.8 billion and $0.7 billion net, respectively. Mixed-asset target allocation conservative funds took in a net $1.8 billion.
In bond funds, investors were net purchasers picked up about $16 billion on taxable issues and $5.5 billion of tax-exempt funds. High current-yield funds lost nearly $7 billion, suffering the worst net redemptions of the taxable group.
General municipal-debt funds had more than $3.5 billion in net inflows.
For June, investors also withdrew a net $43.1 billion from money markets. The tax-exempt group collectively shed a net $5.1 billion during the period, according to Lipper.
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Janet Levaux
Editor-in-Chief Janet Levaux has covered the financial markets since 1991, with a focus on financial advisors since 2005. After graduating from Yale and the Johns Hopkins School of Advanced International Studies (SAIS), where she studied global economics, Janet worked as a freelance financial and business writer in Japan, and then as a reporter and editor for Investor's Business Daily and the Bay Area News Group in California. She earned an MBA in 2007 and since then has helped lead key ThinkAdvisor projects like its Neal-Award winning reporting on Ken Fisher, Luminaries awards program and Women in Wealth newsletter.
