Investors may be following the conventional equity market wisdom to “sell in May and go away” this spring.
Over five weeks, investors pulled billions of dollars out of equity and hybrid funds in favor of bond funds, according to a recent estimated fund and ETF flows and issuance report from the Investment Company Institute (ICI).
More than $38 billion of investor assets flowed out of equity long-term mutual funds and ETFs in the five weeks between April 18 and May 22, while nearly $33 billion flowed into fixed-income mutual funds and ETFs. During this period, the S&P 500 index dropped by nearly 2 percent.
An estimated total of $1.14 billion flowed into long-term mutual funds during the week ending on May 22, according to the ICI, with $3.56 billion flowing into bond mutual funds. At the same time, $1.68 billion flowed out of equity mutual funds, and $739 million flowed out of hybrid mutual funds, which invest in both bonds and equities.
Further breaking down the ICI’s data, $3.22 billion flowed out of domestic equity mutual funds in the week ending May 22, while $1.54 billion flowed into world equity mutual funds. In the bond categories, $1.63 billion flowed into taxable bonds, while another $1.93 billion flowed into municipal bonds.
According to the ICI, $5.5 billion worth of equity ETF shares were issued during the week ending May 22, more than offsetting the outflows from equity mutual funds, while another $1 billion worth of bond ETF shares were issued.
A combined $7.83 billion flowed into ETFs and long-term mutual funds for the week ended May 22. Of this, $3.827 billion went into equity ETFs and mutual funds, while another $4.565 billion flowed into bond ETFs and mutual funds. Hybrid ETFs and mutual funds saw combined outflows of $736 million.