Data from Thomson Reuters Lipper suggest that the week to 22 March saw a significant trend reversal with US mutual equity funds recording net inflows, but ETFs recording net outflows, including $4.3bn from the SPDR S&P 500 alone.
Thomson Reuters Lipper also notes net outflows from the Financial Select Sector SPDR of $961m.
Overall, mutual equity funds attracted $843m in net new money, while ETF net outflows hit $1.9bn over the week. Non-domestic equity funds attracted $1.3bn in net flows.
However, despite the relatively better performance of mutual funds, the data provider said that across all its ‘macro-groups’ including mutual funds and ETFS, there was a second straight week of net outflows in the US. Over the period some $24.8bn has flowed out on a net basis.
Factors blamed for this trend include market concerns over tax cuts promised by the administration of US president Donald Trump, as well as fears that the administration would become “bogged down in the quagmire of healthcare legislation”. US media reports suggest that Trump has set Friday 24 March as a deadline for the US Congress to support his proposed healthcare legislation.
In the week to 22 March, the S&P 500 shed 1.54%, and the Dow Jones Industrial Average shed 1.38%, with both indices on 21 March suffering their worst one-day falls since before the November 2016 presidential elections.
Despite both indices being up about 5% on a year-to-date basis, “there is some thought on the street that if healthcare doesn’t get taken care of now, it will push out the delivery of the all-important tax cuts and put the brakes on the Trump rally,” Thomson Reuters Lipper stated.