Domestic Stock Funds Reverse Flow in January

February 12, 2010 ( - Mutual funds saw inflows of $44.5 billion in January, according to estimates from Morningstar, Inc.

Domestic stock funds gathered $2.7 billion in assets, reversing four consecutive months of outflows, while international equity funds took in more than $8.1 billion – the biggest monthly inflow for the asset class since December 2007, according to a press release.

Meanwhile, bond funds continued to dominate all other asset classes, with investors adding $28 billion to fixed income funds during the month. Based on total net assets, fixed income funds now represent approximately 30% of the mutual fund market, up from 19% at the end of 2007, Morningstar said.  

Although active funds still dominate the mutual fund market, passive strategies have increased their market share to 20%, up from 11% at the beginning of 2000.

Despite significant outflows from several Fidelity large-cap funds in January, the firm registered net inflows of nearly $1.6 billion. With inflows of nearly $16.2 billion in 2009, Fidelity has not come close to making up 2008’s outflow of $37.3 billion, the announcement noted.

American Funds experienced outflows for the seventh straight month, but the pace of the firm’s outflows has slowed, and Davis Funds and Selected Funds, both run by Davis Advisors, saw outflows again last month. Ivy Funds had a strong month, paced by $709.2 million in inflows to Ivy Asset Strategy.

Morningstar’s report on mutual funds activity in January can be viewed at