Weak markets drag down mutual fund, ETF assets in March: SIMA

Despite recording positive net sales, mutual funds and ETFs saw a dip in their assets in March as markets dropped, according to the Securities and Investment Management Association’s (SIMA) latest report released on Tuesday.

Mutual fund assets totalled $2.26 trillion at the end of March, down by $52.4 billion or 2.3% from the previous month, the industry trade group said in its monthly investment fund statistics report. The funds generated $1.3 billion in net sales in the month.

Meanwhile, ETF assets came in at $546.9 billion, down by $0.2 billion or 0.04% since February. ETF net sales were $13.9 billion in March.

Mutual fund sales

Once again, mutual fund net sales were concentrated in conservative fund categories.

Bond fund net sales amounted to $2.8 billion, down slightly from $3.1 billion in February.

Money market funds gathered $2.6 billion in net sales. This was up from $2.1 billion a month prior and the highest level of inflows for the category since March 2020, the report noted.

Specialty mutual funds reported net sales of $974 million, down from $2.5 billion in February.

These gains were partly offset by net redemptions among balanced, equity and long-term mutual funds.

Balanced funds reported net redemptions of $1.7 billion in March, down from $1.5 billion in net sales on a month-over-month basis.

Equity funds recorded $3.4 billion in net redemptions, down from just $195 million in net redemptions.

And long-term funds took a nosedive, with net redemptions of $1.4 billion, down from $6.9 billion in net sales in February.

ETF sales

Though market volatility and economic uncertainty were weighing on investors’ minds, ETFs recorded a major boost in net sales in March.

“In ETFs there was a minimal drop in assets due to strong net inflows, which reached an all-time high in March,” SIMA said.

At $6.4 billion in net sales, the equity fund category recorded the highest level of ETF net sales in the month, with more than 40% of that going to international equity ETFs, the report noted. That’s up from $4 billion in February.

Bond ETFs recorded $4.1 billion in net sales, up from $3.1 billion the month before.

Money market ETFs generated $2.1 billion in net sales, rising from $1.3 billion.

Balanced ETFs recorded net sales of $628 million, slightly down from $750 million a month earlier.

Net sales for specialty ETFs came in at $652 million, a slight drop from $753 million in February.