Despite Ongoing Stock Market Rally, Fund Investors Cling to Bonds

Taxable bond was once again the Morningstar category group with the largest inflows last month. The $24.7 billion taxable-bond inflow was almost equally divided between active and passive funds, continuing the established trend observed so far this year.

International equity attracted $18.7 billion, with the bulk of the flows benefiting passive funds. U.S. equity's $16.6 billion passive inflows were almost balanced out by the $17.9 billion active outflows, resulting in a $1.4 billion outflow for the category group overall.

Other trends in November included:

• Intermediate-term bond and foreign large blend were once again the two categories with the largest inflows in November. Large blend (U.S.) landed third on the top-flowing list despite $3.3 billion in outflows on the active side. Passive inflows were large enough ($7.3 billion) to pull this category up in the ranks.

• High-yield bond suffered the largest outflows of all categories.

• Active flows, overall, were smaller in November than in October. PIMCO and DFA had the largest flows among active funds, while Franklin Templeton and Fidelity continued to suffer outflows.

• BlackRock/iShares almost caught up with Vanguard on the passive side. Fidelity and State Street stayed in positive territory, but their inflows were much smaller than those of the two passive leaders.

• After losing the largest-flows spot to JPMorgan International Research Enhanced Equity last month,  PIMCO Income (PIMIX) was back at the top in November with a $2.6 billion inflow. Dodge & Cox Income (DODIX), which hasn’t made an appearance on this list in a while, landed in second place with $1.2 billion.

• In the passive arena,  iShares Core S&P 500 ETF (IVV) was the only outsider in an otherwise Vanguard-dominated top five. IVV has been stealing ground from SPDR S&P 500 ETF (SPY) for quite some time now, and the trend is showing no signs of stopping.

Download the complete Asset Flows Commentary here.