Assets continued flowing out of actively managed stock funds and into all types of bond funds, with yields across many fixed-income sectors either at or near all-time lows. Since the end of 2008, assets in taxable-bond funds have more than doubled, climbing from $1 trillion to $2.5 trillion, with approximately 65% of the increase attributable to net inflows.
When municipal-bond funds are included, inflows for fixed-income funds have exceeded $1 trillion since the beginning of 2008.
2012 outflows from actively managed U.S.-stock mutual funds surpassed those seen in 2008 despite the fact that the S&P 500 was up 16% for the year. Even when exchange-traded funds (ETFs) are included, large-cap U.S.-stock funds have seen net outflows over the trailing five-year period and in each of the last four years.
Intermediate-term bond funds attracted the greatest inflows of any Morningstar category for the fourth year in a row, taking in $110 billion in 2012. This was almost three times the inflows of $37.5 billion seen by the runner-up, short-term bond.
Vanguard and PIMCO captured 61% of net inflows in 2012, compared with 30% in 2011 and 46% in 2009. The DoubleLine Total Return Bond Fund, which has a Morningstar analyst rating of Neutral, saw 2012 inflows of $20 billion to edge out the Gold-rated PIMCO Total Return Fund, which collected $18 billion for the year.
The Morningstar report is here.