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Commentary

Equity Funds Experience Outflows as Investors Cut Risk

Last month, U.S. open-end funds and ETFs experienced their greatest outflows since August 2015.

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Investors cut risk in June 2018 as long-term U.S. open-end funds and ETFs had their greatest outflows since August 2015. While the bulk of outflows came from U.S. equity funds, which lost $20.8 billion to redemptions, they were hardly alone. Sector-equity, international-equity, allocation, alternative, and commodity funds all had net outflows; only taxable-bond and municipal-bond funds had inflows.

June capped the fourth-worst first half for U.S. equity flows over the past 10 years; only 2009, 2015, and 2016 were worse. The bulk of the net outflows were from large-cap funds, with $19.4 billion leaving large-blend funds alone. This was also the largest monthly outflow for large-blend funds in at least a decade.

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Kevin McDevitt has a position in the following securities mentioned above: IVV, VINIX. Find out about Morningstar’s editorial policies.