Investors shrugged off concerns about escalating geopolitical tensions and poured $79.9bn into international mutual funds and exchange-traded funds through the Lipper fund-flows week ended April 11, 2018.
Investors were net redeemers of domestic equity funds, withdrawing $24.9bn this year as of April 11.
Net flows into emerging markets funds (+$21.7bn) accounted for almost one third of those new international fund purchases, while the diversified international fund classifications took in $52.5bn this year as of April 11. Lipper’s international multi-cap core funds, a go-anywhere classification, took in $35.4bn of those net inflows.
Equity ETFs overall witnessed net inflows for the first flows week in four, taking in a little less than $6.1bn.
The flows went to domestic equity ETFs (+$5.7bn), for the first week in four, and nondomestic equity ETFs (+369m), for the second week in a row.
In contrast, for the third week in a row, mutual funds (ex-ETF) investors were net sellers of equity funds, redeeming $346m. Domestic equity funds, handing back a little less than $1.6bn, witnessed their seventh consecutive weekly net outflows while posting a 0.27% return on average for the flows week. Meanwhile, their nondomestic equity fund counterparts, posting a 1.10% gain on average, witnessed their fourth consecutive week of net inflows (+$1.2bn).
This year, the trend is very clear: mutual fund investors are embracing nondomestic funds (injecting $47.4bn), while rejecting domestic equity funds (redeeming $28bn).
Meanwhile, ETF investors plowed $32.5bn net into nondomestic equity ETFs, and domestic equity ETFs attracted $3.1bn net.
While the trend is not as lopsided on the ETF side of the business, it appears that ETF investors still favor foreign equity investments over domestic.