Passive U.S. equity funds saw $6.6 billion in inflows while active U.S. equity funds had $23.5 billion in outflows.
Together, it was the worst outflows for U.S. equity funds since June 2018.
According to Chicago-based research and consulting firm Morningstar, there’s strong demand for fixed-income investments in the wake of recent interest-rate moves.
Net flows
Morningstar reported on U.S. fund flows for July, and the highlights (or lowlights) include the following:
- In July, long-term funds collected nearly $26.7 billion, a drop from June’s $46.1 billion. Net flows went to taxable-bond, municipal-bond, and money-market funds as interest-rates continued to fall.
- Money-market funds took in $75.7 billion in July. The group has collected about $202.0 billion over the past three months alone, the strongest three-month stretch in at least 10 years.
- Taxable-bond funds saw about $40.2 billion in inflows in July, the group’s best showing since January 2018. It was also the best month for active taxable-bond funds since October 2012, which collected nearly $27.0 billion, more than twice the inflows for passive taxable-bond funds. This reflects the popularity of credit-oriented strategies, which active funds tend to favor more than their passive counterparts.
- The positive momentum for municipal-bond funds also continued in July, as the group collected $10.2 billion in inflows. If this pace continues, 2019 could be a record year for municipal-bond inflows, which were nearly $60.9 billion for the year-to-date through July.
- Among all U.S. fund families, Vanguard led with nearly $14.9 billion in long-term inflows. Its Vanguard Total Bond Market II Index and Vanguard Total Bond Market Index, which both currently have a Morningstar Analyst Ratin of silver, fared best with inflows of $3.2 billion and $2.4 billion, respectively. On the other hand, iShares had about $4.2 billion in outflows, its worst outflows since June 2018.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of 401(k) Specialist and 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. Experienced financial services content executive specializing in creative new media delivery. He joined the American Retirement Association in 2023 as Chief Content Officer, overseeing communications for the organization, as well as its sister organizations.
