The Federal Reserve’s decision to hike rates has rejuvenated investor interest in Money Market Funds. So far, a whopping $769.48B has flowed into this category year-to-date. Fidelity® Inv MM Fds Government Instl (FRGXX) and Schwab Value Advantage Money Inv (SWVXX) are spearheading this trend, with both funds amassing over $50B this year.
While Money Market Funds have stolen the spotlight, another discernible trend is evident when you look past their massive flows. Passive funds have garnered substantial favor, attracting $301.4B in net flows, while active funds have seen $219.6B in net outflows this year.
Active mutual funds have felt this pressure the most, but certain stalwarts like Strategic Advisers® Fidelity US TtlStk (FCTDX) and JPMorgan Large Cap Growth R6 (JLGMX) have bucked the trend, drawing $4.3B and $5.3B in Q3 respectively.
As of September 30th, ETFs have brought in $321.8B YTD as Passive ETFs become increasingly favored. For context, in 2021 – the best year for ETF inflows – they attracted $900B, followed by $614B in 2022. In Q3, two of the most popular S&P 500 ETFs led the way, with iShares Core S&P 500 ETF (IVV) and Vanguard S&P 500 ETF (VOO) bringing in $18.9B and $9.2B, respectively.
Mirroring Money Market Funds, fixed-income funds have also basked in the rising-rate scenario, pooling $34.7B in Q3. Intermediate core and core-plus bond funds were the primary recipients, bringing in a cumulative $41B in the quarter.
Vanguard funds claimed the top 3 spots in the quarter. The Vanguard Total Bond Market ETF (BND) led the pack, bringing in $4.1B, Vanguard Total Bond Market II Idx Inv (VTBIX) amassed $3.4B, and Vanguard Total Bond Market II Idx I (VTBNX) attracted $2.7B.
Ultrashort bond funds also had a good quarter, reigning in $10.9B. iShares® 0-3 Month Treasury Bond ETF (SGOV) and iShares Treasury Floating Rate Bond ETF (TFLO) led the way, reeling in $4.6B and $4.2B, respectively, in Q3.
Narrowing this universe down to firms with under $100B in total ETF AUM provides insights into how niche players have faired in 2023. Pacer US Cash Cows 100 ETF (COWZ) has brought in the most assets ($4B) this year, and VanEck Morningstar Wide Moat ETF (MOAT) has brought in $3.6B while producing 12.6% YTD total returns.
Let the trend be your friend, whether strategizing for ETF assets conversion or capitalizing on inflows into Intermediate Core Bond and Intermediate Core-Plus Bond funds. Being well-informed empowers your conversations with advisors, offering them current and relevant market insights.
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YCharts offers several tools to help illustrate why an advisor should use your strategy as they rebalance portfolios for the end of the year and the start of 2024. From unearthing competing funds using the Fund Screener to crafting compliant-friendly Scenarios to Stress Testing your fund’s performance in similar market environments, YCharts has got you covered.
With the power of Talking Points and Proposals, you can create high-level messaging to position your fund as a superior alternative. Whether presenting your fund as an opportunity to save an advisor’s client money during tax season or simply showcasing your fund as a higher yield alternative, you can use YCharts’ Proposals and Talking Points to provide an advisor with high-level reasons why your fund is the right choice for their clients.
With fund flow data and these tools, you can align your strategies with market trends and advisors’ conversations with their clients. Check out our recent Fund Flows Webinar for more ideas on combining YCharts and flow data to grow AUM.
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