Investors Turn to Taxable-Bond, Commodity Funds in February

Rocked by tumultuous markets in January, fund investors flocked to the perceived safety of bonds and gold in February.

Taxable-bond funds experienced nearly $8 billion in estimated net flows--more than any other category group overall. The U.S. equity group continued to experience outflows, but at a much lower rate than January. International equity, after being the leader for many months, received smaller but still positive flows in February--most of which was on the active side. Finally, commodities experienced another positive month, attracting a much larger inflow than in January, most of it driven again by investors piling into gold-related funds.

Other items of note in this month's report include:

• On the U.S. equity front, the ongoing trend of outflows from active funds and inflows to passive funds continued.
• Allocation and taxable bond were two other category groups to post outflows on the active side this past month. Notably, passive taxable-bond funds experienced significant inflows of $12.9 billion.
• Conversely, active funds in the municipal-bond and alternatives category groups received significant inflows, suggesting that investors find active management to be more appealing in these categories.
• Four of the five funds on the top-flowing active funds list were fixed-income funds.
• High-yield funds have been struggling in the past 12 months. Despite poor returns, however, February flow data shows that investors are returning.
• Foreign large-blend remains the category attracting the largest flows.

Access the full report here (PDF).