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August Fund Flows Up to Nearly $17 Billion, Morningstar Reports

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Morningstar on Tuesday said flows into long-term mutual funds increased by more than 11% in August to $16.8 billion, with fixed-income funds receiving the majority of these assets.

However, outflows from U.S. ETFs reached $1.3 billion in August, ending a six-month streak of inflows, the research firm said September 14.

Taxable-bond funds accumulated assets of $168.5 billion year to date, with much of these inflows likely attributable to low yields on money market funds, Morningstar says. Money market funds have seen outflows in 16 of the 19 months since February 2009, for a total loss of nearly $1.0 trillion.

Outflows persisted for U.S. stock funds, with redemptions of $14.3 billion in August, especially in the large growth and large value Morningstar categories.

Domestic-equity funds have seen outflows of $42.2 billion in 2010 and $25.7 billion in 2009, but U.S. stock funds still have total net assets of more than $2.9 trillion. In addition, passively managed domestic-equity funds have seen inflows in 34 of the past 36 months, according to Morningstar.

International-stock ETFs had inflows of $4.4 billion, the highest of all asset classes for the second-straight month, thanks to strong demand for emerging-markets ETFs.

SPDR S&P 500 (SPY), the largest ETF in terms of net assets, saw outflows of $6.6 billion in August, as investors moved their assets into higher-yielding equity strategies.


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