Mutual fund and ETF flows for June were the strongest since January, according to Morningstar.
Overall, long-term mutual funds and ETFs collected $70 billion in June, and second-quarter inflows totaled $121 billion, replacing more than a third of the record $327 billion of outflows in March. Unsurprisingly, bond funds were heavily favored.
Morningstar’s report about U.S. fund flows for June 2020 is available here.
LISTEN TO OUR INTERVIEW WITH MORNINGSTAR’S CHRISTINE BENZ HERE
Highlights from the report
- Taxable-bond funds set another record in June, collecting $92 billion for the month and surpassing the previous record set in May by $17 billion. The group gathered $204 billion for the second quarter, rebounding from outflows of $240 billion in March.
- U.S. equity funds lost nearly $24 billion to outflows in June, bringing the second quarter’s net redemptions to a record $72 billion. This surpassed the previous record of $55 billion of outflows set in the first quarter of 2009, as stock markets approached their low point during the global financial crisis. After $18 billion of outflows in June, international equity funds suffered a record $65 billion in outflows for the second quarter.
- Within taxable-bond categories, intermediate-core bond funds collected a record $23 billion in June. This surge owed partly to the Federal Reserve ramping up its purchases of corporate-bond ETFs (BlackRock manages investments for the Secondary Market Corporate Credit Facility—the program under which the Federal Reserve buys corporate-bond ETFs—and BlackRock will waive any management fees it would earn from purchasing its own funds through the facility.) As a result, corporate-bond funds saw inflows of $14 billion in June.
- Among fund families, the BlackRock/iShares family topped the list in June with a combined $22 billion of inflows, primarily driven by the Federal Reserve’s entry into the corporate-bond ETF market. Vanguard came in a close second with nearly $21 billion of inflows, benefitting from strong flows into its bond index funds.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
