June was also another good month to bond fund inflows, which recorded roughly $11 billion in new assets. For the entire second quarter, equity fund inflows could reach near $67 billion with over $35 billion in bond fund inflows during the quarter, according to data from Strategic Insight.
Looking at the aggregate, long-term fund inflows exceeded $100 billion during the second quarter. This was only the fourth time in the history of the mutual fund industry when quarterly cash inflows of long-term funds eclipsed $100 billion, the previous quarters coming in during the first quarter of 1998, 2000 and 2002.
Further, the recent pace of closed-end fund Initial Public Offerings (IPO) have been setting a new high water mark, with the $5 billion raised in June the fastest monthly pace on record. Already for the year, IPO activity has exceeded 2002 full-year results and is nearing its all-time annual pace, of $18 billion, established in 1993.
“What’s remarkable in the recent data is that improvements in industry’s cash flows have been triggered not by speculative exuberance; instead we have observed small incremental gains, yet across many investment strategies, funds, management companies, and distribution channels. Investors only slowly increased their purchasing activity, or slightly re-allocated risk capital previously shifted to cash or bond investments,” said Avi Nachmany, Strategic Insight’s Director of Research, in a statement.