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Commentary

New Year, Not-So-New Trends in Fund Flows

January fund flows set a new monthly record with taxable bond funds continuing to dominate.

Feb 27, 2018

Flows for all category groups totaled $128.1 billion in January, setting a monthly record. The previous largest flow, $116.2 billion, occurred in January 2013.

The taxable bond category topped all categories, receiving a total inflow of $47.0 billion, almost equally distributed between active and passive. International equity attracted $41.9 billion, with the majority of those flows going to passive funds. In fact, the international equity category group attracted its largest monthly flow since April 2015.

Passive U.S. equity funds saw their largest monthly inflow since December 2016, attracting $41 billion; active U.S. equity funds saw outflows of $24 billion.

Among other trends last month:

Large blend was the overall top-flowing Morningstar category in January despite a $7.3 billion outflow on the active side.

High-yield bond funds experienced outflows for the fourth consecutive month.

On the active side, American Funds rallied in January with a $7.9 billion inflow.

PIMCO Income (PIMIX) and Oakmark International (OAKIX) maintained a place on the top-flowing list in January. They were the most popular funds in the taxable-bond and international-equity category groups, respectively. Newcomer American Funds Tax-Exempt Bond (AFTEX) stole first place, however, revealing investor appetite for municipal bonds.
In the passive arena, SPDR S&P 500 ETF (SPY) received the largest flows in January, just as it did in December.

Download the complete Asset Flows Commentary here.

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