25 Funds Investors Are Buying
These funds are seeing big inflows. Is investor enthusiasm warranted, or is it just performance-chasing?
Investors have thrown in the towel on some of the newfangled nontraditional bond funds, but they're not giving up on bonds altogether. Nor have they pulled the plug on investing overseas, despite weak performance in foreign stocks versus U.S. And they're dipping a toe into liquid alternative funds, likely out of concern that today's low bond yields and not-cheap equity valuations could portend weak future returns for conventional assets like stocks and bonds in the years ahead.
Those are some of the key takeaways from our most recent survey of funds that investors have buying, a counterpart to our recent article about funds that have seen high investor redemptions over the past year. Our data, compiled by Morningstar senior research analyst Annette Larson, focused on traditional mutual funds rather than exchange-traded funds; ETF flows can be tricky to estimate because of investors can buy and sell them intraday. We also looked at the largest flows into funds based on dollars, not as a percentage of their assets; the latter exercise tends not to be too illuminating in that it turns up a lot of dinky funds that aren't widely owned.
Christine Benz does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.