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Mutual fund assets slid downward for the third straight month, according to recent Cerulli Associates research.

The Cerulli Edge – U.S. Monthly Product Trends Edition, which analyzes mutual fund and exchange-traded fund (ETF) product trends as of April 2018, finds that mutual fund assets dropped 0.2% in April to close with assets totaling just more than $14.5 trillion.

The 4% growth experienced in January has been erased, with April assets coming in at less than year-end 2017.

Mutual fund assets were “dragged backward” by equity market volatility and geopolitical uncertainty, among other factors, according to Cerulli.

The only two Morningstar categories posting positive net flows were large-blend funds ($4.5 billion) and small growth funds ($743 million).

According to Cerulli, the large-blend Morningstar category continues to be a buoy for overall U.S. equity flows.

Mutual funds categorized as large blend collectively reaped net flows of $4.5 billion during April, the most of any Morningstar category. Of these net flows, passive products accounted for $7.1 billion, while active bled $2.6 billion. Just 35% of active large-blend funds witnessed positive net flows during April, with just six funds accumulating more than $100 million.

The two-largest funds in the category — both Vanguard index products — collectively account for 37% of large blend assets and 14% of all U.S. equity assets. According to Cerulli, U.S. equities have bled $33.6 billion year to date; however, excluding just these two products, outflows are more than $60 billion.

“Financial advisors increasingly prefer to invest in U.S. equity via index mutual funds and ETFs, thus contributing to outflows from actively managed U.S. equity mutual funds,” Cerulli states.

While the mutual fund asset slide continued into April, Cerulli reports that ETFs reversed course during the month, increasing total assets by 1.2%.

According to Cerulli, net flows of $28.9 billion, which equate to 0.8% organic growth, propelled ETF assets forward.

Invesco’s ETF brand PowerShares closed a $1.2 billion deal to absorb 58 Guggenheim ETFs in April, boosting the firm’s AUM to $177.5 billion. The product line now accounts for 5.1% of total ETF assets. Also occurring in April was an agreement in which Aberdeen agreed to buy ETF Securities’ U.S. ETF business.

Possible explanations for ETF growth is interest from affluent-focused advisory practices, in addition to a growing interest in smart beta.

Cerulli finds that almost one-third of client assets are allocated to passive strategies. High net worth-focused registered investment advisors continue to be the largest adopters of ETFs, with 93% of active and passive asset managers citing demand.

Cerulli also finds that advisors reported that strategic beta would grow from 17% of their allocation to ETF products in 2017 to 22% over the next two years. According to Cerulli, this is significant as ETFs continue to make up a growing part of client portfolios.

“Though ETF issuers tend to position strategic beta as a diversification tool and alpha generator, the primary reason financial advisors report choosing them is to mitigate risk in client portfolios,” Cerulli states.