Passive funds leading demand - US Monthly Highlights - November 2016 Report

Net new investment to long-term mutual funds and ETPs totalled US$3.9 billion in November. Active and passive strategies continued to experience divergent trends in net investments. Passive funds led demand with US$67.7 billion of inflows (including US$49.4 billion to ETPs), while actively managed funds experienced aggregate net redemptions of US$63.9 billion in November.

Domestic Equity funds saw the strongest demand among long-term funds, attracting net inflows of US$21.1 billion. This segment has experienced net outflows of US$39.5 billion in the year-to-date period through November. International Equity funds saw net redemptions in November (US$4.8 billion) and the year-to-date period (US$19.2 billion).

Taxable Bond funds experienced outflows of US$1.8 billion in November, while Tax-Free Bond funds saw outflows of US$10.7 billion. November represents the only month in 2016 that Tax-Free Bond funds experienced net redemptions. Taxable Bond funds have only seen outflows in January and November of 2016.

Money Market funds experienced a significant increase in net deposits to US$54.8 billion in November from US$6.0 billion in October. Taxable Money Market funds were responsible for most of this increase with net inflows of US$53.0 billion. The biggest difference in November from the rest of 2016 was that prime money market funds experienced moderate inflows (US$220 million). The segment had seen significant net redemptions throughout 2016 because of pending regulation which ultimately came into effect in October.