March 3, 2011

Vanguard Tops January Fund Charts; Industry Inflows at $42 Billion, Says FRC

In January 2010, industrywide fund flows were under $28 billion, and in December 2010, they were just $7 billion

Stock and bond funds experienced net inflows of estimated $42.5 billion in January, reported the Boston-based Financial Research Corp. on Wednesday.  That’s up 54% from flows of $27.6 billion in the same month last year and a huge increase of 490% from December’s flows of $7.2 billion.

Equity funds had net inflows of $26.6 billion, followed by the international-global equity funds with $13.0 billion in net flows. In the December 2010, funds into these categories were $8.9 billion and $16 billion respectively.

A year ago, equity funds experienced net outflows of $15 billion in the month, while international-global equity funds grew by nearly $13.5 billion.

The Powershares QQQ Trust 1 attracted $2.5 billion to lead the fund sales chart, according the research group.  (FRC estimated data includes ETFs and excludes money-market funds.)

By Morningstar category, the large-blend fund group led in January 2011, with $7.1 billion in net inflows. It experienced outflows of $15.1 billion in January 2010. Bank-loan funds had inflows of $6.3 billion in the first month of 2011, while high-yield bonds attracted $5 billion.

Natural-resources funds drew $3.1 billion, and broad-commodities funds had $2.1 billion in January inflows.

Target-date funds’ net inflows (net of proprietary funds of funds) were $1.2 billion, while short-term bonds experienced a similar level of fund gains.

Fund Families

Vanguard remains the largest fund group in terms of assets, excluding funds of funds. It now has about $1.41 trillion, up from $1.39 trillion in December and $1.14 trillion a year ago, says FRC.

American Funds is the second largest with $980 billion, and Fidelity is third with nearly $887 million.

BlackRock is catching up to the three-largest fund groups with $586 billion, as is PIMCO with $411 billion.

Overall, the industry has some $9.1 trillion in net assets, a slight jump from $9.0 trillion in December and good increase, 21%, from $7.5 trillion a year ago.

Most Popular Funds

After Powershares QQQ’s net inflows of $2.5 billion, the Vanguard Total International Stock Index Fund attracted the second-largest amount of flows: $2.1 billion. The two funds have $25 billion and nearly $54 billion in assets, respectively.

The Templeton Global Bond Fund attracted $1.6 billion, and the SPDR S&P 500 ETF had close to $1.5 billion in flows.

Other popular funds included the Vanguard Emerging Market Stock Index, Vanguard Total Bond II and the iShares Brazil ETF.

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