After contributing USD26.8bn to US long-term mutual funds in October, investors added just USD2.7bn in November, according to data from Morningstar.
While the pattern of outflows for US stock funds continued, investors also lost enthusiasm for fixed income funds.
Money market funds were the direct beneficiaries with inflows of USD24.7bn, their best month since January 2009.
US ETFs saw inflows of USD10.3bn in November, pushing year-to-date inflows to USD95.6bn and total industry assets to USD951.5bn.
Inflows for taxable bond funds reached just USD6.1bn in November versus USD21.0bn in October, the smallest monthly inflow for the asset class since May.
After 22 consecutive months of net inflows, municipal bond funds saw net outflows of USD7.6bn in November. This reversal comes after investors added nearly USD105.6bn to the asset class from January 2009 through October 2010 and marks the worst month for municipal bond funds in terms of net outflows except for the USD8.0bn redeemed in October 2008 during the credit crisis.
US stock ETFs, with inflows of USD7.9bn, topped all ETF asset classes in November, followed by international stock ETFs with weaker, yet positive flows of USD2.3bn as a result of renewed sovereign credit fears in Europe and a stronger US dollar.
Vanguard collected USD6.3bn of the USD10.3bn assets added industry-wide in November. The firm’s ETF assets rose more than 62 per cent over the last 12 months, allowing it to capture nearly 15 per cent of the market share.
After recording inflows during every month this year, taxable bond ETFs saw outflows of USD660m in November.
Silver ETFs continued to see healthy inflows. Investors looking to increase their commodities allocations may see silver, which has seen price appreciation of 65 per cent year to date, as a good alternative to gold, which has gained 26 per cent over the same period.
