Fears across the pond have fixed income funds flying high.
Research behemoth Morningstar reported U.S. mutual fund and exchange-traded fund (ETF) asset flows for May. Investors continued to allocate money to fixed income, with taxable- and municipal-bond funds attracting $15.4 billion and $8.2 billion, respectively.
International-equity funds sustained outflows across the board, active and passive, prompted by concerns over Britain’s potential exit from the European Union. Morningstar estimates net flow for mutual funds by computing the change in assets not explained by the performance of the fund and net flow for ETFs by computing the change in shares outstanding.
Highlights from Morningstar’s report about U.S. asset flows in May:
- U.S. equity funds continued their pattern of passive inflows and active outflows. The category group’s active offerings had outflows of $18.7 billion, while passive funds collected $8.1 billion.
- Flows to commodities funds spiked in May after a downward trend since February. The majority of inflows, $2.5 billion, went to passive funds, particularly precious metals.
- BlackRock/iShares suffered outflows of $4.8 billion in May; both active and passive flows were in negative territory. American Funds had another strong month, and year to date, American and T. Rowe Price are the only active providers among the 10 largest fund firms with net inflows.
- PIMCO Income, which has a Morningstar Analyst Ratingof Silver, had inflows of $1.6 billion to best Gold-rated Metropolitan West Total Return Bond for the highest inflows among active funds in May. Templeton Global Bond, which has a Gold Analyst Rating, led active-fund outflows during the month with $1.2 billion.
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.
