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Kinnel: Do Large-Growth Outflows Matter?

Assets may still be flowing out of actively managed large-growth funds, but that doesn't provide investors with a strong buy or sell signal.

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Christine Benz: Hi, I'm Christine Benz for Morningstar.com. Actively managed large-cap growth funds have been seeing outflows, but does that make them a buy? Joining me to discuss that topic is Russ Kinnel. He is director of manager research for Morningstar.

Russ, you wrote an article in the latest issue of Morningstar FundInvestor where you looked specifically at Fidelity Magellan and noted that it has been seeing asset outflows recently and you unpacked the significance or lack thereof of that. But let's talk about large-cap growth funds more broadly. As a group they have been seeing significant asset outflows; these are the actively managed funds. You've written in the past about how outflows from a given category can sometimes be a little bit of a buy signal, a contrarian indicator. What's your take on this particular category of large-cap growth funds?

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Russel Kinnel does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.