Have U.S. Equity Funds Turned a Corner?

Taxable-bond funds remained the undisputed favorites in February, attracting $35.5 billion in estimated net flows.

U.S. equity funds, however, received double the flows they had taken in the previous month. Even more interesting, the overall increase did not come from expanding flows on the passive side, as one might expect. Instead, the increase came from a reduction in outflows on the active side. Active U.S. equity funds only lost $8.9 billion in February compared with $20.8 billion in January. U.S. equity has been in positive-flow territory for four consecutive months now, a feat not witnessed since September through December 2014.

International-equity funds enjoyed $14.7 billion in new flows, mostly on the passive side.

Other notable trends for the month include:

• All category groups except allocation enjoyed positive flows in February.
• The intermediate-term bond category took the top spot, with positive flows to active and passive funds alike.
• T. Rowe Price, American Funds, and PIMCO had respectable flows among active managers in February. J.P. Morgan remained in positive territory, but its inflows were noticeably smaller. Fidelity and Franklin Templeton suffered outflows. Vanguard and iShares continued to dominate on the passive side.

Download the complete Asset Flows Commentary here.