The aggregate of total mutual fund flow in the final week of February slowed from a break neck pace but still logged its eighth consecutive positive inflow
The Investment Company Institute (ICI) is the trade group for the asset management industry and releases a weekly survey that outlines the inflow or outflow within most mutual funds in the U.S. While mutual funds have been undergoing a secular shift to exchange traded funds, in the current market environment of buoyant equities, declining correlations, and still adequate cash on the sidelines, mutual fund demand is enjoying a resurgence to start 2013.
For the week ending February 27th, all mutual fund products which include all equity, fixed income, and hybrid funds enjoyed another positive week of net investor subscriptions or inflow totaling $8.4 billion. This was the eighth consecutive week of positive investor subscriptions to all funds which started the first week of 2013 with the week ending January 9th. The resulting 12 week average, which we estimate is a relevant snapshot of a medium term trend, is that all mutual fund flow has averaged $8.5 billion, with a peak of $26.5 billion during the first week of the year, with the worst week of the last 12 being the $9.4 billion outflow during the last week of the 2012. Thus the $8.4 billion total inflow in the most recent period according to the ICI was slightly below average as outlined above.
To handicap the weekly inflow year-to-date, the first 8 weeks of 2013 have produced $125.6 billion in total mutual fund inflow. This is compared against the first eight weeks of 2012 which tallied just $75.9 billion, so the demand for actively managed mutual funds is up 65% to start the New Year. The public companies with the biggest mutual fund franchises as a percentage of their total assets under management that would benefit from continued demand for funds include Legg Mason (LM), Franklin Resources (BEN), and Janus Capital (JNS).