Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Portfolio > Mutual Funds

Value Funds Gobbled Money in March: Morningstar

Your article was successfully shared with the contacts you provided.

What You Need to Know

  • The overwhelming majority of the value fund inflows went to passive funds.
  • Commodities were the only U.S. fund category to experience outflows.
  • Fund families known for passive management, like Vanguard, were the winners in March.

March 2021 was an exceptional month for mutual fund and ETF inflows.

The funds collected a record $156 billion in net flows for March, breaking the $144 billion record set just the month before, according to Morningstar’s latest monthly fund flows report.

Monthly records were set for U.S. equity funds inflows — $54 billion — and emerging market equity fund inflows — $14 billion. Value funds continued their comeback, with large-cap U.S. value funds collecting $20.1 billion in March and small-cap value funds collecting $5.4 billion— both in line with the resurgence in the performance of value stocks.

Investors also favored international equity funds, taking in $31 billion, their highest inflows since January 2018. Diversified emerging market funds collected a record $14 billion.

Positive flows into fixed income funds continued for the 12th consecutive month, at $48 billion in March, capping a whopping $786 billion over the past year.

Commodities were the only U.S. fund category to experience outflows. A total $2.5 billion flowed out of commodity funds — more than twice the level that left in February.

Investors Favor Passive Over Active Despite Value Funds Comeback

Despite the strong inflows into stock and bond funds, U.S. investors also deposited large sums into money markets in March, a total $126.1 billion, or roughly four times the inflows in February.

They also strongly favored passive funds over active funds. Passive funds accounted for almost 90% of the $20 billion that large-cap U.S. value funds collected.

The preference for passive funds was also reflected in the data for fund families. Vanguard, and BlackRock’s iShares, which are best known for their passive funds, had the biggest fund inflows in March. Fidelity Investments and SPDR State Street Global Advisors followed.

Fund families known for their active strategies, like Dimensional Fund Advisors, T. Rowe Price and Franklin Templeton Investors saw net outflows in March. Both DFA and T. Rowe Price have recently entered the ETF market, which could potentially help boost inflows but that remains to be seen.

Morningstar March Fund Flows chart

Ark Investment Management, which has only ETFs and most are actively managed, saw inflows of only $880 million March after collecting a “staggering $8 billion” in February, according to Morningstar.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.