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Cerulli Report: Mutual Fund and ETF Assets Decline in May

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Aggregate mutual fund and exchange-traded fund values dipped in May, shedding assets for the second consecutive month.

Cerulli Associates, Boston, published this finding the June 2012 issue of its U.S. Monthly Product Trends Edition. The publication is one among a suite of periodicals from the company that explore issues and trends in asset management and distribution.

In May, mutual fund assets declined by close to 5%, as flows ($14.1 billion) totaled $7.2 billion less than in April. The Cerulli report notes that taxable bonds funds contributed to the decline in flows, with their lowest monthly inflow in eight months, at just less than $8 billion.

ETF assets depleted by 6% in May, and hit a 2012 low with $1.1 trillion in assets. However, Cerulli reports, flows remained positive ($3.2 billion), as taxable bond funds let flows into ETFs with the asset class’ second-highest monthly inflow ever ($7.1 billion).

Taxable bond funds, Cerulli says, peaked in January 2012 with $7.3 billion in net flows. Also in May, commodity funds shed flows for the third consecutive month, but managed to keep flows positive at $2.3 billion (2012 year-to-date).

International stock ETFs shed $31.4 billion in assets in May with $3.5 billion in outflows. August of 2011 ($5.4 billion) was the last time international stock funds saw outflows of more than $3 billion, the report says.

Intermediate-term bond and long government Morningstar categories led inflows into the ETF arena in May with $2.9 billion and $1.3 billion, respectively. Intermediate-term and diversified emerging markets rank at the top of all categories by year-to-date flows with $8.7 billion and $8.4 billion, respectively.

Actively managed funds experienced their worst monthly inflow in five months with $7.6 billion, as passively managed mutual funds recovered from their dip in April ($6.6 billion in May). Contributing to the decline in flows, actively managed intermediate-term bond funds only garnered $1.6 billion in May, $4.2 billion less in flows than in April, the report shows.