International Stock Funds Take Lead Over U.S. Equities

After four months during which U.S. and international-equity funds attracted similar inflows, international equity took the lead in the equity space with a little over $21 billion in total flows.

U.S. equity's winning streak seems to have waned, as the category group received only a meager $280 million in April 2017. It’s too early to tell if investors’ marked preference for international over domestic equity is a new trend or only a one-month stint.

International may have been leading among equity category groups, but taxable bond was still the overall leader with an inflow of almost $26 billion. Sector equity, allocation, and municipal bond all posted outflows for the month.

Other fund-flow trends for the month included:

• In April, total flows were the lowest we've seen so far this year. The positive part of flows was almost equally distributed between taxable bond and international equity.

• In terms of Morningstar Categories, foreign large blend and large blend landed in first and second place on the top-flowing list in April, pushing intermediate bond down to third after several months spent at the top.

• Muni-national short was the Morningstar Category with the largest outflows in April.

• On the passive side, BlackRock/iShares came dangerously close to snatching the top spot from Vanguard: Only $1 billion more and BlackRock would have been in the lead.

• In April, PIMCO along with American Funds, BlackRock, and State Street attracted higher active flows than Vanguard: Vanguard's active flows were actually negative.

Download the complete Morningstar Asset Flows Commentary here.