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Morningstar

Long-Term Flows Rebound in June

Passive funds record their best month year to date.

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Note: This is an excerpt from the Morningstar Direct U.S. Asset Flows Commentary for December 2018. The full report can be downloaded here.

Long-term open-end funds and exchange-traded funds rebounded with $46 billion in June inflows after experiencing nearly $2 billion in outflows in May. Long-term flows were strong during 2019's first half overall, totaling $224 billion, slightly ahead of $219 billion in 2018's first half. Money market funds collected a solid $37 billion in June and took in more during the second quarter than long-term funds, $111 billion versus $93 billion.

Passive funds--across all category groups--had their best month year to date, collecting nearly $69 billion in June. Active funds lost about $22.5 billion to outflows. Overall, passive funds' market share is now close to 40%, up from 37.4% 12 months ago.

Other key takeaways:

  • Passive U.S. equity funds saw June inflows of $29.5 billion versus $20.2 billion of active U.S. equity outflows. Nevertheless, active U.S. equity fund assets remain slightly ahead of their passive counterparts.
  • IShares led all families with $34.6 billion in inflows, benefiting from strong demand for its equity factor ETFs. State Street followed with $14.3 billion, while Vanguard came in third.
  • After weak demand in May, taxable-bond funds recovered with an on-trend $37.4 billion in inflows. Conversely, demand for international-equity funds has dried up; this group had $5.5 billion in June outflows, and year-to-date inflows are less than $1 billion.

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About the Authors

Kevin McDevitt

Senior Analyst
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Kevin McDevitt, CFA, is a senior manager research analyst for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He covers primarily domestic- and international-equity strategies, as well as some multi-asset strategies.

Before rejoining Morningstar in 2009, McDevitt was an associate equity analyst and later managed trust portfolios for AG Edwards, which became Wachovia (now Wells Fargo). McDevitt originally joined Morningstar in 1995. He was a mutual fund analyst from 1996 to 1999 and also held positions within the company’s international team, Morningstar Associates, and Morningstar Investment Services.

McDevitt holds a bachelor’s degree in finance from the College of William & Mary and a master’s degree in business administration from Washington University. He also holds the Chartered Financial Analyst® designation.

Gabrielle Dibenedetto

Columnist
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Gabrielle DiBenedetto is a data journalist for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. She works to tell stories and create visualizations using Morningstar’s broad spectrum of data and research.

Before assuming her current role in 2018, DiBenedetto was a client-services representative for the Morningstar Direct and Morningstar Office platforms. Prior to that, she interned at Boston Magazine, covering startup companies and venture capital. She also interned on the business desk at the Wisconsin State Journal, covering local business development.

DiBenedetto holds a bachelor’s degree in journalism and economics from the University of Wisconsin-Madison. Follow Gabrielle on Twitter: @gr_dibenedetto

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