Investors withdrew $11.4 bn from U.S. equity funds in July, according to Morningstar’s monthly report on mutual fund asset flows. It was the third consecutive month of outflows, following net withdrawals of $8.3 bn in June and $6.9 bn in May.
Overall flows into long-term mutual funds remained positive in July at $14.4 billion, but this total is noticeably lower than in recent months. Morningstar estimates net flow by computing the change in assets not explained by the performance of the fund.
Other highlights from the report were:
- Taxable-bond funds continued to see strong inflows despite declining interest rates. For the past three months, taxable-bond funds have seen the greatest inflows among all category groups.
- Despite the strong month for the taxable-bond category group overall, high-yield bond funds saw outflows of $7.9 bn in July after much milder redemptions of $466 million in June and inflows of more than $1.2 bn in each of the previous months of this year except January. Bank-loan funds also saw sizeable outflows of $1.9 billion.
- Even though U.S. equity funds saw outflows, Vanguard Total Stock Market Index, Vanguard Institutional Index, and Vanguard Total International Stock Index recorded July inflows of $2.6 bn, $2.2 bn, and$1.8 bn, respectively.
- With four of the five top-flowing funds for the month, Vanguard topped all providers in terms of July inflows, while Fidelity suffered the greatest provider-level outflows as a result of large redemptions from two of its flagship active U.S. equity funds.
- Passive funds continued to dominate, collecting $14.1 bn in July compared with inflows of $0.3 bn for active funds.
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