what is fund flow 
fund flow is the cash that flows into and out of various financial assets for specific periods of time it s usually measured on a monthly or quarterly basis fund flow doesn t measure the performance of any single asset but emphasizes how cash is moving for example with mutual funds fund flow measures the cash involved in share purchases or inflows and the cash resulting from share redemptions or outflows it doesn t say anything about how well or badly a fund performed net inflow occurs when more cash flows into say the mutual fund than out of it a net inflow creates excess cash for managers to invest theoretically this then creates demand for securities such as stocks and bonds a net outflow would indicate that more cash was taken from the mutual fund than was invested in it understanding fund flowinvestors have a choice of where to allocate their investment capital and normally place it in financial markets that they expect to be profitable if they then contemplate a downturn in the markets and their investments they may extract their investment capital and any profits this movement of investment capital is the fund flow of cash in the financial markets investors and market analysts watch fund flows to gauge investor sentiment relating to specific asset classes sectors or the market as a whole for instance net fund flow for bond funds that s negative during a given month by a large amount might signal broad based pessimism for the fixed income markets fund flow focuses on the movement of cash only and reflects the net flow after measuring inflows and outflows inflows can include the money retail investors put into mutual funds outflows can include payments to investors or payments made to a company in exchange for goods and services fund flow does not include any money that is due to be paid it looks at only actual cash that was paid into or out of the asset investors can find information about fund flow from information aggregators like morningstar and investment research firms for example the investment company institute ici provides estimated fund flows for long term mutual funds the latest estimate for july 2022 shows a net outflow of 12 82 billion 1fund flow statementsa fund flow statement discloses the types of inflows and outflows a company experiences the fund flow statement can highlight fund flow that might be out of the ordinary such as a higher than expected outflow due to an irregular expense further it often categorizes the various transaction types and sources to help track any fund flow activity changes fund flow changesbroadly speaking fund flow changes could reflect a change in customer sentiment this could relate to new product releases or improvements recent news regarding a company or shifts in feelings about an industry as a whole positive fund flow changes note an upswing in inflow a lessening of outflow or a combination of the two in contrast negative fund flow suggests lower inflows higher outflows or both while occasional shifts may not be cause for concern repeated instances of negative fund flows can be a worrying sign for example it could indicate that income can t meet a company s expenses if the trend continues a company might need a form of debt to continue operating exampleaccording to morningstar for march 2022 u s long term mutual funds and exchange traded funds etfs had total inflows of 30 billion u s large growth funds that typically see redemptions or outflows took in 9 3 billion that month still due to previous months low inflows the first quarter of 2022 was the weakest for inflows since first quarter 2020 despite a bit of good news such as for long term government bond funds which took in 8 7 billion a 9 8 one month growth rate morningstar concluded that this low level of inflow reflects softening sentiment and investor caution 2