One year since Trump’s win, US funds enjoy strong growth

LONDON (Reuters) – Assets managed by US-based funds have grown substantially, led by equity funds, since Donald Trump won the US presidential elections a year ago.

Though financial markets have been broadly skeptical about the ability of the Trump presidency to pass significant political reforms since he won the US election, funds have enjoyed inflows and have seen the value of their holdings rise as global financial markets enjoyed double-digit returns.

As the Trump presidency approached a oneyear anniversary on Wednesday, total net assets under management of US mutual funds including exchange-traded funds climbed by a sixth to $21.1 trillion over the one-year period ending September 30, according to data from Thomson Reuters.

Equity funds were the leaders, with assets under management for stock funds seeing the biggest increase over that period. Total assets rose by a fifth to $11.4t. as of end-September, and global stock markets hit new peaks.

US stocks hit a record high on Monday with stocks up more than 15% year-to-date, while an index of high-yield US bonds was up by a similar quantum in that period.

While performance has been a key driver as rising markets pushed up valuations, inflows have also been robust, especially to passively managed funds, as active managers faced another year of fierce competition from their exchange-traded counterparts.

Of the $691 billion of net inflows that was pumped into US mutual funds over the oneyear period ending September 30, about $685b. has gone into passively managed funds.

Of that amount, nearly $500b. has gone into passively managed equity funds, while actively managed equity funds saw $235b. of outflows during that period.

In the fixed-income space, inflow trends were a bit more evenly matched, with actively managed funds seeing $145b. of net inflows, compared with $191b. of inflows into bond exchange-traded funds in that period.