June Outflows: Nearly $50 Billion for Money Markets, Other Funds

FRC says money-market funds lost more than $48 billion, while stock and bond funds dropped roughly $500 million

Money-market, stock and bond funds had net outflows of $48.8 billion in June, according to data released by the Financial Research Corp. late Friday, which includes ETFs, but excludes fund-of-funds.

Money-market funds experienced the biggest pain–with $48.3 billion in net outflows in June, which followed outflows of $5.8 billion in May. Year to date, money-market funds have experienced $136.7 billion in outflows vs. outflows of $489.4 billion for the first six months of 2010.

When combined with stock and bond funds, though, the mutual fund industry looks far healthier: It has experienced close to $35 billion in total net inflows in the first six months of 2011 vs. outflows of roughly $270 billion in the same period of 2010. Total assets stand at $12.1 trillion vs. $10.3 trillion in June 2010.

Stock, Bond Funds

Excluding money markets, long-term stock and bond funds had outflows of $487 million in June, after experiencing net inflows of $12.5 billion in May. Year to date, these fund groups have had net inflows of $171.4 billion vs. inflows of $219.3 in the same year-ago period.

On the positive side, international/global fixed-income funds experienced net inflows of $5.7 billion in the month, followed by government bonds with $4.5 billion and international/global equity funds with $2.5 billion. Tax-free funds drew $2.2 billion, while corporate-focused funds gained $665 million.

Equity funds had outflows of $16 billion, though some ETFs faired quite well: The SPDR S&P 500 attracted $4.4 billion to lead the fund sales chart, FRC says.

By Morningstar category, world bonds led the flows list in June with $3.4 billion. Intermediate-term bonds had close to $3.4 billion, while multi-sector bonds had nearly $3.1 billion in net flows. Diversified emerging-markets funds attracted nearly $3.1 billion, and emerging-markets bonds expanded by $2.6 billion.

Top Funds, Groups

Vanguard continues to top the fund-family chart in terms of assets with $1.52 trillion. American Funds is in the second-largest position with $988 billion, followed by Fidelity with $919 billion.

BlackRock has roughly $625 billion, while PIMCO has $438 billion and Franklin Templeton $355 billion.

The largest fund families saw their overall asset levels fall slight in June from the prior month by between 0.2% (PIMCO) to 2.5% (Fidelity).

Year to date, though, these fund groups have grown their assets by a range of 1.55% (American Funds) to 7.54% (PIMCO and Franklin Templeton).

The SPDR S&P 500 was the post popular individual fund in June (with flows of $4.4 billion).

Other funds that attracted large flows include the Vanguard MSCI Emerging Markets Fund ($2.5 billion) and the Franklin Templeton Global Bond Fund ($2.0 bonds).

Thanks to the popularity of its global-bond fund and overall investor sentiment that has recently turned against equities, the stock of Franklin Resources (the parent company of Franklin Templeton) has been trading up about 14% vs. stock declines of roughly 10% for other asset managers and custody banks included the S&P 500, Bloomberg reported Friday.

According to FRC, the Franklin Templeton Global Bond Fund has experienced inflows of $10.7 billion in the first six months of 2011. It now has about $59 billion in total assets.

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