Refinitiv Lipper Reports $1 Trillion Gain in Equity Funds in 3rd Quarter of 2020

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After reading that jaw-dropping headline, are you wondering what $1 trillion USD actually looks like? Here’s a great visual depiction from Living Waters on YouTube. Short answer – it’s big.

Fintech and data firm Refinitiv (through it’s Refinitiv Lipper division) has just released the results of a Q3|20 report noting that AUM in exchange-traded products and mutual funds rose $1.024 trillion for the quarter, year over year.

According to Tom Roseen, Head of Research Services at Refinitiv Lipper:

“In 20Q3, U.S. investors pushed equity funds to their second consecutive quarter of plus-side performance as they cheered improving employment figures and the Federal Reserve Board’s continued commitment to keep interest rates low.  However, investors kept a wary eye on business and school re-openings and the “hoped for” additional round of fiscal stimulus. For the quarter, the average equity fund and taxable fixed income fund posted a 6.71% and 1.87% return, respectively.”

According to their recently released report, the largest percentage of net inflows in 2020 went into Lipper’s Institutional U.S. Government Money Market Funds classification ($357.5B USD), with Wells Fargo Government Money Market Fund winning out as the top attractor in the category.

The second spot went to Lipper’s Institutional U.S. Treasury Money Market Funds classification with $253.6B USD net inflows YTD.

Further details specifically on Q3 from Refinitiv Lipper are outlined below from their press release:

  • For Q3 2020, the average equity fund and taxable fixed income fund posted a 6.71% and 1.87% return, respectively, which contributed to the rise in assets under management.
  • TNA in the conventional funds business (excluding ETPs) rose 3.02%, climbing $655.4 billion from Q2 2020 to just a little less than $22.400 trillion for Q3 2020.
  • The short-/intermediate-term bond funds macro-group (+$104.0 billion) had the largest draw of net new money for Q3, while the money market funds macro-group (-$213.5 billion) experienced the largest net redemptions.
  • TNA in U.S. ETPs increased 8.43% from $4.375 trillion for Q2 2020 to slightly less than $4.744 trillion for Q3 2020.
  • The short-/intermediate-term bond ETPs (+$32.5 billion) macro-group had the largest draw of net new money for Q3 of all the ETP macro-groups, while the emerging markets ETPs (-$1.0 billion) macro-group suffered the largest net redemptions.
  • For Q3, actively managed funds—excluding money market funds—took in some $17.1 billion net, while their passively managed counterparts attracted $76.9 billion.

Bottom line – despite the pandemic, there was a huge amount of new cash going into the markets. Presumably, a substantial share of all that cash came from the PPP loan program and other stimulus.