Redemptions of nearly $15.0 billion from domestic-equity funds, the largest monthly outflow since March 2009, contributed to outflows of $13.2 billion for all long-term mutual funds in May, Morningstar reported in a fund flows update on Friday, June 11.
Morningstar’s report on estimated U.S. mutual fund and exchange-traded fund asset flows through May 2010 also credited market uncertainty about Europe’s troubles for international stock fund outflows.
“The European economic woes that dominated the headlines throughout the month brought an end to 13 consecutive months of steady inflows for international-stock funds. The asset class saw outflows of nearly $6.0 billion in May,” the Chicago-based research firm said in a release.
Despite the market malaise, U.S. ETFs saw inflows of $4.8 billion in May, bringing year-to-date net inflows to $24.7 billion, according to the Morningstar Direct Fund Flows Update. The ETF industry had roughly $792.6 billion in assets as of the end of May.
The report showed high-yield bonds to be a trouble spot. While most bond categories saw positive flows in May, all but 34 of the 146 high-yield bond funds registered outflows in May. A total of $6.3 billion exited the category in May, for the largest monthly outflow since Morningstar began keeping record in 1998. Conversely, short-term bond funds attracted $4.0 billion in new assets during the month.
Excluding target-date funds, approximately 80 new funds have launched in 2010, according to Morningstar. Managed by star fixed-income manager Jeffrey Gundlach, the top newcomer is DoubleLine Total Return, which has amassed total net assets of $610 million since its early April debut.
As for exchange traded funds, commodities, with more than $5.6 billion in net inflows, topped all ETF asset classes in May. SPDR Gold Shares GLD, which has about $50 billion in total net assets and holds more than 1,200 tons of gold bullion, led the way.
Read a May 17 Mutual Fund Wrapup from the archives of InvestmentAdvisor.com.