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US Fund Flows: Inflows Come to a Screeching Halt in April
Plummeting equity markets and rising long-term interest rates killed the momentum built in first-quarter 2024.
Key Takeaways
Long-term US mutual funds and exchange-traded funds suffered $9 billion of outflows in April 2024.
US equity funds shed $21 billion in April.
Active ETFs continued their red-hot start to the year with $22 billion of inflows, beating out passive ETFs’ $15-billion haul.
After building momentum through 2024’s first quarter, plummeting equity markets and rising long-term interest rates dampened fund flows in April. Long-term US funds shed about $9 billion—their first month with net outflows since October 2023, when similar market conditions prevailed.
The charts below illustrate which direction the money is flowing for a variety of fund types. For a more complete analysis, download the full report from Morningstar’s Adam Sabban and Ryan Jackson.
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To the charts.
Investors pulled $21 billion from US equity funds in April. Six of the group’s nine categories suffered outflows. Notably, small-growth funds saw over $3 billion leave, equivalent to the worst organic growth rate since March 2020, and the fifth worst over the past decade. The category typically sees outflows as investors move to passive small-blend funds.
Active ETFs Outpace Passive Peers in April
Active ETFs pulled in $22 billion to passive ETFs’ $15 billion in April, their widest margin of victory in a month where both groups finished with inflows. Active ETFs have collected more than one third of all ETF flows in 2024 despite representing only 6% the market at the start of the year.
Bond-Fund Investors Play It Safe
Taxable-bond funds collected $25 billion in April, a solid sum but their lowest in 2024. Sinking markets and high interest rates directed flows to the group’s safest corner. Investors poured $9 billion into cash like ultrashort bond funds and pulled a combined $8 billion from the riskier corporate and high-yield bond categories in April—a reversal from the months before it.
Outflows the New Normal for Sustainable Funds
Sustainable funds saw about $1.5 billion leave in April, their 10th-consecutive month of outflows. They’ve now shed around $18 billion over the trailing 12 months. Only sustainable taxable-bond funds have enjoyed meaningful inflows in 2024—they collected roughly $1.0 billion. Conversely, sustainable US, international, and sector-equity funds have all struggled.
More on Fund Flows from Morningstar
For more comprehensive analysis and commentary on US Fund Flows, download this month’s full report. Topics include:
- Most Sector Funds Slump
- Multisector Bond Flows Powered by Pimco
- Options-Based Products Flex Their Staying Power
- A Look Inside Invesco
Can’t get enough fund flows data? Check out Morningstar’s Ultimate Guide to Fund Flows.
This article is adapted from the Morningstar U.S. Fund Flows report for March 2024. Download the full report here.