Passive U.S. equity funds saw $29.5 billion in outflows while active U.S. equity funds lost $20.2 billion to outflows
Jul 16, 2019 — CHICAGO, July 16, 2019 /PRNewswire/ — Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment research, today reported estimated U.S. mutual fund and exchange-traded fund (ETF) fund flows for June 2019. Overall, passive U.S. equity funds saw $29.5 billion in outflows while active U.S. equity funds lost $20.2 billion to outflows.
Morningstar estimates net flow for mutual funds by computing the change in assets not explained by the performance of the fund, and net flow for U.S. ETFs shares outstanding and reported net assets.
Long-term open-end mutual funds and exchange-traded funds rebounded with $46 billion in inflows in June 2019 after experiencing nearly $2 billion in outflows the month prior. Despite the dip in May, longterm flows were strong during 2019’s first half, totaling $224 billion, slightly ahead of 2018’s $219 billion.
Passive funds 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. The past five years have seen a new level of demand for passive funds.
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.
Highlights from the report include:
- In June, long-term open-end mutual funds and ETFs rebounded with $46.0 billion in inflows after nearly $2.0 billion in outflows in May. Despite last month’s dip, long-term flows were strong during 2019’s first half, totaling $224.0 billion, slightly ahead of 2018’s $219.0 billion.
- Passive funds had their best month year-to-date, collecting $68.6 billion in June while active funds lost approximately $22.5 billion to outflows.
- Taxable-bond funds recovered from May’s weak demand with $37.4 billion in inflows. Among active taxable-bond funds, multisector-bond fund Pimco Income, which holds a Morningstar Analyst Rating™ of Silver, dominated with $1.9 billion in June inflows. It finished the first half of 2019 with $13.7 billion in inflows, more than twice that of runner-up Lord Abbett Short Duration Income.
- Among all U.S. fund families, iShares led in June with $34.6 billion in inflows, which benefitted from strong demand for its equity factor ETFs. Bronze-rated iShares Russell 1000 Value had the largest inflows of $5.0 billion, while iShares Russell 1000 Growth wasn’t far behind with inflows of $4.0 billion in June. For both funds, those figures were their best monthly inflows ever.
To view the complete report, please click here.
About Morningstar, Inc.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offers an extensive line of products and services for individual investors, financial advisors, asset managers, retirement plan providers and sponsors, and institutional investors in the private capital markets. Morningstar provides data and research insights on a wide range of investment offerings, including managed investment products, publicly listed companies, private capital markets, and real-time global market data. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $210 billion in assets under advisement and management as of March 31, 2019. The company has operations in 27 countries. For more information, visit www.morningstar.com/company. Follow Morningstar on Twitter @MorningstarInc.