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Fresh market highs fail to lift Equity Fund flows in late June

As has been the case for most of 2019, the final days of June found mutual fund investors largely ignoring the recent highs recorded by US equity markets. Instead, they focused on the less bullish signals being generated by global bond markets and the impending meeting between US President Donald Trump and Chinese leader Xi Jinping at the June 28-29 G-20 summit in Japan. Investors committed another $15.2 billion to EPFR-tracked Bond Funds during the fourth week of June, taking the year-to-date inflow total past the $300 billion mark, while Equity Funds collectively posted outflows for the 12th time in the past 15 weeks.

Over $1 billion committed to Gold Funds and to funds with socially responsible (SRI) or environmental, social and governance (ESG) mandates kept the headline number for Equity Funds outflows in check, as did the fifth consecutive weekly inflow recorded by Japan Equity Funds. The week did see Europe Equity Funds snap a redemption streak stretching back to early February.

Despite the recent redemptions, Equity Fund managers overall continue to hold relatively low levels of cash. Two groups bucking this trend are Global and Europe Equity Funds, whose average cash weighting is currently at its highest level since mid-#q13 and early 4Q11 respectively.

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