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Stock Funds Bled Assets for First Time Since January: Morningstar

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What You Need to Know

  • Active U.S. equity funds suffered the biggest outflows, hurting their asset managers.
  • Vanguard continued to reign supreme in fund assets and positive asset flows.
  • Active fund managers T. Rowe Price and Franklin Templeton suffered big net outflows.

U.S. equity funds in July saw their first monthly outflows since January, bleeding a net $7.2 billion, according to Morningstar’s latest monthly fund flow report.

Actively managed funds, which had been attracting new assets for much of the year, accounted for all of the outflows in U.S. equity funds, losing $19.3 billion, while passive U.S. equity funds collected $12.1 billion in new assets. The fund flows data cover mutual funds and ETFs in multiple asset categories.

Morningstar fund flows July 2021Small-cap value led the equity fund outflows, at $3.6 billion, followed by mid-cap (-$3.5 billion and financial funds (-$3.1 billion) but even large-cap and small-gap growth funds experienced outflows of around $2 billion each.

Fund managers such as T. Rowe Price and Franklin Templeton, which focus on actively managed funds, suffered large outflows overall, along with Invesco and State Street Global Advisors, which experienced big outflows in their passive funds, largely due to outflows in their U.S. equity funds.

Morningstar fund Flows per asset managers for JulyCapital Group, home to American Funds, which are all actively managed, however, saw total net inflows of almost $2 billion despite net outflows in its U.S. equity funds, J.P. Morgan had inflows of $2.3 billion in its actively managed funds and $842 million into passive funds.

Vanguard, as usual, led fund flows for the month and trailing 12 months, up $36.4 and $241.0 billion, respectively, followed by Fidelity Investments (11.1 and 7.6 billion) and BlackRock’s iShares ($6.8 and $7.2 billion). Dimensional Fund Advisors, which has been experiencing outflows mot months

Overall, passive funds attracted $57 billion, led by ETFs, while active funds collected $15 billion. Over the 10 years ended July 30, U.S. equity ETFs collected $1.2 trillion while open-end mutual funds shed $1.3 trillion.