Fund flow analysis: DM equity MF

In our previous fund slow analysis of Global ETFs, major trends of 2016 was quite clear, as investors pulled money away from riskier assets in January to safe havens and that trend is now fading with once again investors ploughing back into riskier assets.

In comparison to that mutual fund flows aren't presenting a clearer picture like that, nevertheless there are some trends, which is important to note:

• US equities may have lost its charm to investors, as oil price has collapsed and Federal Reserve looking to hike rates. Moreover stronger Dollar hurt US exporters as well as cut down royalties of the domestic companies.

• Since May, 2014, as shown in figure US mutual funds have suffered negative monthly fund flows largely. Since then, there has only been three months when cash flows were positive. In 2015 alone, $1.7 trillion dollars have flown out of US mutual funds.

• Other developed market mutual funds have been gross benefactor of this outflow. In 2015 alone, $977 billion inflows were seen in other DM mutual funds.

• This trend seems to be continuing in 2016. Till March 3rd, US equity mutual funds have suffered -$19.2 billion outflow, whereas $23.1 billion has moved to other DM mutual funds.