Back to even, but equity fund outflows persist
U.S. equities fought their way back during May and into June to a year-to-date return of nearly zero. The broad U.S. market Russell 3000 index ended Monday's session down 0.14%, or up 0.7% when accounting for dividends. That is remarkable considering it was down more than 30% 54 days prior.
The rally was spurred by a combination of federal stimulus, relative improvements in unemployment and evidence that the nation is turning a corner on COVID-19 cases. More than two weeks of protests after the death of George Floyd, which have gone global, haven't seemed to have had a material impact on the markets.
Global equity recovery has been slower, the MSCI ACWI ex-U.S. index was down 8.2% at Monday's close.
May ETF and mutual fund flow data from the Investment Company Institute show that investors may still be wary of a true recovery. Perhaps spooked by fundamentals, U.S. funds added a net $1.6 billion in new money, during the week ended May 27 after losing a net $41.1 billion over the previous four weeks. Ex-U.S. funds lost about $4 billion in net outflows during the week of May 27.
The Russell 3000 index opened trading Tuesday morning lower, dropping the year-to-date return to -1.13%.