According to Morningstar’s monthly mutual fund asset flows report, U.S.-stock mutual funds and exchange-traded funds (ETFs) bled $22.4 billion in August, making it the worst month in two years and the fifth worst during the past five years for the asset class.
International-stock funds had $2.8 billion in outflows, the group's worst showing since December 2011. In addition, investors seem to have lost their taste for world-bond and inflation-protected bond funds. These two former favorites absorbed just over $600 million in combined August inflows.
However, investors poured $26.4 billion into taxable-bond funds ($30 billion if ETF flows are included) and another $5.6 billion into municipal-bond funds in August. Altogether, inflows into these funds surpassed $1.1 trillion since the end of 2008 when the Fed cut rates to zero. The complete August report is at http://www.global.morningstar.com/augustflows12.