The Markets December 17, 2012

U.S. Stock Fund Outflows May Surpass Record

Outflows from U.S. stock funds may surpass 2008’s record of $96.7 billion, according to Morningstar Inc.
Reported by

Morningstar’s estimated U.S. mutual fund asset flows through November show U.S.-stock funds shed another $14.1 billion, with particularly strong outflows from growth-oriented offerings. Active equity funds with lower expenses experienced slower outflows than higher-fee funds. Within the U.S.-stock broad asset class, funds rated Gold, Silver or Bronze by Morningstar exhibited slower rates of decline than neutral- or negative-rated funds.

Investors continued to shift assets to fixed-income funds, as open-end taxable-bond funds and municipal-bond funds collected $17.9 billion and $5.2 billion, respectively.

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Additional highlights of the report include:

  • Intermediate-term bond funds led all categories in terms of inflows for the sixth month in a row, garnering $8.3 billion in new assets; 
  • Investors redeemed $3.6 billion from high-yield bond funds in November, a category that has seen inflows of $24.4 billion so far this year, while continuing to add to bank-loan funds. These offerings took in new assets of $1.8 billion to bring the year-to-date total to $9.2 billion; and 
  • Inflows to emerging-markets bond funds slowed to $882 million in November. However, the category—which began the year with assets of just $46.3 billion—has taken in $20.0 billion year-to-date. Diversified emerging-markets were the lone bright spot within the international-stock asset class, collecting inflows of more than $1.1 billion.

The complete report is available here.

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