Long-term mutual funds and exchange-traded funds (ETFs) attracted USD32.6 billion of new investor cash in August driven by strong flows to international-stock funds and demand for fixed income, according to figures released by Morningstar.
US equity mutual funds and ETFs suffered outflows of USD4.1 billion, dragged down by active US equity funds, which saw their sixth-consecutive month of outflows.
Morningstar estimates net flow for mutual funds by computing the change in assets not explained by the performance of the fund and net flow for ETFs by computing the change in shares outstanding.
Assets in long-term mutual funds and ETFs reached USD13.9 trillion as of the end of August. While the majority of these assets are invested in actively managed funds, passive investments experienced an 11 per cent organic growth rate compared with growth of just two per cent for active funds during the trailing 12 months.
Taxable-bond fund flows exceeded flows into US equity funds for every month this year. Year to date, taxable-bond mutual funds and ETFs have attracted new assets of USD99.2 billion, while US equity mutual funds and ETFs mustered just USD3.5 billion year to date through August.
Foreign large blend and diversified emerging markets led all categories in terms of inflows in August. Excluding PIMCO Total Return, which has a Morningstar Analyst Rating of Gold, active intermediate-term bond mutual funds and ETFs rebounded during the last six months. On the other side of the spectrum, the high-yield bond category had its two highest consecutive months of outflows on record in July and August.
Among active fund providers, J.P. Morgan topped other firms in terms of inflows over the trailing 12 months, followed by Goldman Sachs and Oakmark. Vanguard continues to dominate flows through the strength of its passive line-up of mutual funds and ETFs.