Bond Funds Continue Pull on Assets

SI projects full-year 2009 net flows into traditional bond funds (including VA bond funds) will come in at an all-time record of almost $400 billion (with an additional $50 billion or so into bond ETFs). The company said this is a remarkable number considering that neither bond fund nor stock fund flows have ever individually topped $300 billion in any one year (see SI: Bond Funds On Track for Record Inflows in 2009).

In contrast, notwithstanding a 4.8% rise in NAVs on average (asset-weighted) in November, stock/hybrid funds received only small inflows, because of continued concerns about the sustainability of the global economic and stock market revival, according to SI’s Highlights of November 2009 Mutual Fund Industry Results. Although flows into international equity funds remained stable at recent modest levels, totaling $12 billion in November, U.S. equity funds suffered (modest) net outflows for the third consecutive month, yielding an overall equity fund net flow total of just about $8 billion.

Assets in money-market mutual funds, where investors are currently earning near-zero yields, declined by an additional $51 billion in November. Flows into target-date funds-of-funds gathered strength in November, rising to $4.2 billion, and flows into risk-based lifecycle funds-of-funds were positive but small, at just under $200 million, in aggregate.

ETF/ETN flow volumes doubled to $15 billion in November, and were driven by diversified Emerging Market, Gold, Natural Resources, Inverse-exposure, S&P 500 Index funds, and China Region funds. Year-to-date through November, ETFs/ETNs have collectively garnered an estimated $87 billion in net new flows.

Among smaller-size managers of long-term funds, those that led in total long-term fund flows for the month were TCW, Van Eck, Rafferty Asset Management, Lazard Asset Management, Manning & Napier Advisors, Sentinel Asset Management, Matthews Asian Funds, International Value Advisors, and Claymore Advisors.

Among the largest firms (firms with more than $20 billion in long-term fund assets under management), those garnering the most long-term fund flows were Vanguard ($10.6 billion); PIMCO/Allianz Global ($7.6 billion); Barclays Global Investors ($2.9 billion); JPMorgan ($2.9 billion); Franklin Templeton ($2.5 billion); T. Rowe Price ($2.1 billion); State Street Global Advisors ($1.2 billion); and BlackRock ($1.2 billion).