The final week of February saw only slight inflows into all equity mutual funds, posting a below average number after a strong run to start the year
The Investment Company Institute (ICI) released its mutual fund survey for the week ending February 27th, displaying that all equity funds including both domestic and international equity funds, brought in $1.0 billion for the week. All equity funds have had a strong start to 2013 with not one week of outflow thus far this year. However the latest weekly tally revealed below average results. The average weekly inflow over the past 12 weeks, a period we estimate translates into a more measurable medium term trend, is now $2.2 billion. The best week thus far during this stretch was the first week of the year at $14.3 billion of inflow with the worst week in the past 12 being the last week of 2012 which marked $10.7 billion in outflow. The year-to-date total for all equity flow is now $55.3 billion in new investor subscriptions (inflow) versus the first 8 weeks of 2012 which had inflows of just $2.4 billion.
With correlations in the stock market declining, which benefits active stock managers (see our article outlining the decline in correlations), and still ample un-invested cash on the sidelines that can be re-invested into higher performing stocks (see our article outlining our analysis on un-invested cash), the demand for stock funds can continue to run at above average levels. With a strong start to the year for equity mutual funds, the leading stock fund managers that benefit from the current trend are T Rowe Price (TROW), Invesco (IVZ), and Janus Capital (JNS). TROW and IVZ stocks are also held by the StateStreet Financial SPDR exchange traded fund (XLF).