Last week, Morningstar reported that fund outflows fell heavily in July as ETFs increased. Meanwhile, in new portfolio products, Aberdeen has taken over management of The Singapore Fund.
Here are the two latest developments of interest to advisors:
1) Morningstar July Mutual Fund Outflows Saw Biggest Redemption Since 2008 as U.S. Stock ETFs Grew
Morningstar reported on Thursday that July’s long-term U.S. mutual fund outflows of $17.1 billion marked the greatest monthly net redemption since December 2008, again fueled by the flight out of U.S.-stock funds. In comparison, Morningstar estimated that exchange traded fund (ETF) asset flows through July saw nearly a doubling of inflows, at $17.2 billion.
The mutual fund asset class shed $22.9 billion in July, the greatest outflows since investors withdrew $27.9 billion during the peak of the credit crisis in October 2008. International-stock mutual funds shed $3.7 billion in July, but inflows of $1.3 billion into diversified emerging-markets stock funds curtailed greater losses. Foreign large-cap, world-stock and moderate-allocation funds all sustained outflows of at least $2.0 billion.
Meanwhile, U.S. ETFs saw inflows of $17.2 billion in July, building on inflows of $9.8 billion a month earlier. Total ETF assets have increased roughly 25% over the trailing 12 months, and U.S.-stock ETFs collected inflows of $6.4 billion in July to top all other ETF asset classes for the second consecutive month. International-stock ETFs built on June’s inflows of $2.4 billion with inflows of $3.8 billion in July.
After outflows of $3.7 billion and $892 million in May and June, respectively, commodities ETFs reversed course in July and recorded inflows of $3.7 billion. Precious metals offerings accounted for the majority of inflows into commodities ETFs.
Taxable bond ETFs made another solid contribution to overall ETF inflows in July, with $3.3 billion in new assets. The asset class has not seen a net monthly outflow since December 2010. Taxable-bond mutual funds collected inflows of $8.9 billion in July, while municipal-bond fund flows were relatively flat for the third consecutive month. Flows into the national municipal-bond categories continued to strengthen, while single-state categories again saw outflows.
As for government-bond mutual funds, investors fled the category in July after interest picked up in June. After contributing $1.5 billion to these funds a month earlier, investors pulled $1.3 billion from the three main government-bond categories in July.
Combined June and July money market outflows approached $150.0 billion, as investor fears about the government’s failure to raise the debt ceiling and a potential credit freeze likely led many to shift assets to the greater liquidity of savings accounts.
To view the complete report, please visit http://www.global.morningstar.com/julyflows11.
Aberdeen announced Tuesday that it has assumed responsibility for the management of The Singapore Fund Inc. (SGF) effective Aug. 6. The Singapore Fund is an NYSE-listed closed-end investment company with current total assets of $162 million.
Aberdeen Asset Management PLC is the parent company of an asset management group managing assets for both institutional and private clients from offices around the world.
Aberdeen Asset Management Asia Limited, based in Singapore and a subsidiary of Aberdeen, is the fund’s manager. Singapore is the head office of Aberdeen’s Asian operations with more than 150 investment professionals in Singapore, Sydney, Bangkok, Kuala Lumpur and Hong Kong.