Funds Record Net Redemptions in December 2016

Passive funds led demand with $62.3 billion of inflows, while actively managed funds experienced aggregate net redemptions of $64 billion in December, Strategic Insight data shows.

Long-term mutual funds and exchange-traded products (ETPs) experienced net redemptions of $1.7 billion in December, according to Strategic Insight, parent company of PLANSPONSOR and PLANADVISER.

Active and passive strategies continued to experience divergent trends in net investments. Passive funds led demand with $62.3 billion of inflows (including $45.7 billion to ETPs), while actively managed funds experienced aggregate net redemptions of $64 billion in December.

Taxable Bond funds experienced the most net deposits among long-term funds at $12.3 billion, a rebound from November’s outflows. Taxable Bond funds experienced net inflows in both passive and active segments, though passive funds brought in $10.0 billion compared to only $2.3 billion for active Taxable Bond funds. Tax-Free Bond funds in December experienced their greatest monthly net redemptions of 2016 at $16.3 billion.

Domestic Equity funds led Equity funds with $8.0 billion in net deposits, while International Equity funds saw outflows of $5.7 billion. Both segments experienced net redemptions for 2016 as a whole. Equity outflows were concentrated among active products ($48.8 billion) while passive Equity funds experienced inflows of $51.1 billion.

Growth & Income, which includes large-capitalization strategies, led inflows among ETPs in December, bringing in $22.4 billion. This represents the highest net inflows of any ETP objective in any month of 2016, surpassing the record total the objective achieved in November.

More about Strategic Insight is at www.sionline.com.

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