Passive U.S. Equity Funds Lose Fans in March
Active U.S. equity funds experienced outflows for the month, too, as investors directed dollars to taxable-bond and international-equity funds instead.
With the S&P 500 logging its first negative quarter since 2015's third quarter, investors pulled more than $21 billion from U.S. equity funds. With positive but slowed flows into taxable-bond and international-equity funds, overall long-term flows were nearly $13.4 billion in March. Money market funds had nearly $55 billion in outflows.
Strikingly, U.S. equity outflows were almost evenly divided between actively and passively managed funds. Active outflows were nearly $11 billion, while passive outflows were not far behind at about $10.6 billion. March was also the second consecutive month of passive equity outflows. Before March, passive U.S. equity funds hadn’t had outflows since April 2015. Nevertheless, these outflows don't necessarily reflect a broad trend. That's because the lion's share of outflows emanated from just two ETFs. SPDR S&P 500 ETF (SPY) had a whopping $15 billion in outflows and iShares Core S&P 500 ETF (IVV) followed with nearly $9.7 billion in outflows.
Kevin McDevitt has a position in the following securities mentioned above: IVV. Find out about Morningstar’s editorial policies.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.