March Flows Spell Positive Quarter for Mutual Funds

Passive funds continued to drive the strongest inflows, according to Strategic Insight. 

Monthly mutual fund flow data published by Strategic Insight (SI), an Asset International company, shows inflows of $46.7 billion to long-term mutual funds during March lifted “quarterly long-term non-VA ’40 Act fund flows” to $54.3 billion for the first quarter of 2016.

Passive funds continued to drive even stronger inflows, SI finds, attracting $47.4 billion during the month and totaling $83.4 billion on the quarter.

U.S. equity funds netted $7.4 billion during March, ending the month in positive net flow territory for the second time in the trailing 12 months. Outflows from active U.S. equity persisted, SI finds, totaling $13.6 billion in March. International equity funds netted $2.6 billion on demand for index exchange-traded funds (ETFs) and mutual funds, while passive emerging market stock funds attracted $5.8 billion during the month.

The SI data shows that among broad asset classes, taxable bond funds led monthly net inflows, collecting $31.1 billion on strong demand for both active and passive corporate bond exposure. Municipal bond funds continued to see steady positive net investment, attracting $5.6 billion during the month and lifting quarterly net inflows to $16 billion. As of March, net new investment to bond funds year-to-date totals $55.7 billion.

Monthly net redemptions from money-market funds totaled $13.4 billion.

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