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Fund Spy

August Accelerates Mutual Fund Outflows

But passive equity and alternative strategies continue to draw interest.

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Outflows from open-end mutual funds accelerated in August, with a total of $31.9 billion moving out last month. Diversified domestic-stock funds have seen $69.7 billion in outflows for the year, including $9.2 billion in August. That is perhaps not surprising, given that every diversified domestic-equity Morningstar Category saw a loss of 4% or more last month.

However, flows haven't strictly followed returns: Taxable-bond funds saw outflows of $23.5 billion last month, more than twice those of domestic-stock funds--even though they have half the market share and didn't see as strong of a sell-off. Even municipal-bond funds saw outflows last month, though they were generally in the black.

Laura Lallos does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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