Inflows of $29.9 billion into taxable-bond funds overcame redemptions of $16.8 billion from U.S.-stock funds. September was the 17th consecutive month of outflows for U.S.-stock funds and further evidence of investors' preference for the perceived safety of fixed income over equities, Morningstar said.
Following the Fed's announcement that it will keep short-term rates near zero through mid-2015, investors revealed a willingness to take on risk within fixed-income. Riskier categories such as emerging-markets bond, high-yield bond and bank-loan each saw inflows of approximately $2.0 billion during the month.
The largest fixed-income category, intermediate-term bond, collected new assets of more than $13.2 billion, bolstered by inflows of $2.8 billion for PIMCO funds and more than $1.4 billion for DoubleLine.
Within equities, nearly every category saw outflows, led by large-growth with redemptions of $5 billion. While open-end equity mutual funds lost assets of $16.8 billion, nearly an equal amount flowed into equity exchange-traded funds.
Dividend-focused funds have attracted $17.3 billion in assets this year, even as U.S.-stock funds lost $82.6 billion overall. To view the complete report, visit www.global.morningstar.com/septflows12.