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Funds

No Summer Break for Taxable Bond, International Equity Funds

U.S. stock funds suffered outflows in July, due largely to redemptions from actively managed funds.

Far from experiencing a slowdown, taxable bond and international equity saw a lot of activity in July. The two Morningstar category groups attracted $34.7 billion and $23.0 billion, respectively. For both, the majority of these flows came from passive funds. Active flows, in the meantime, remained positive and considerable in size.

U.S. equity, overall, remained in outflow territory, dragged by $19.6 billion in redemptions from active funds. Passive funds received $10.8 billion.

Alternative and commodities funds suffered outflows from passive management and inflows to active management in July, reversing the pattern we’ve gotten used to seeing recently.

Other trends in July include:

  • The top-flowing four Morningstar Categories remained the same in July as in the previous two months: foreign large blend, intermediate bond, large blend, and diversified emerging markets.
  • Vanguard remained the top family in terms of positive flows in July, with BlackRock/iShares coming in second. However, Fidelity's decision last year to cut fees on its index funds and ETFs has been a success: flows into its passive funds have consistently been in positive territory ever since.

Download the complete Asset Flows Commentary here.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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