Minimal equity fund flows over the month resulted in bond funds accounting for 90% of September’s long-term fund net intake. Bond programs have received a majority of long-term fund flows in each month since April, with their share steadily rising since May, SI said.
International equity funds posted 5.64% returns on average (asset-weighted) and drew a net flow of $8.6 billion in September, but despite parallel, continued recovery in the U.S. stock markets, investors withdrew $5 billion on a net basis from U.S.-focused equity/hybrid mutual funds. Year-to-date through September, international/global equity programs have accounted for 80% of total equity fund flows.
International equity funds outperformed U.S. equity funds by more than one percentage point in September, and have a 10 percentage point advantage year-to-date over U.S. programs, SI pointed out. International programs also retain a dramatic longer-term advantage over U.S equity funds (36 percentage points over the trailing five years).
Money-market mutual fund assets declined by nearly $130 billion in September, while ETF/ETN flows totaled close to $9 billion, and were driven by Bond, Diversified Emerging Market, Gold-Oriented, Small-Cap Core, and Dedicated Short Bias products. Year-to-date through September, ETFs/ETNs have collectively garnered an estimated $65 billion in net new flows.
An increase in net flows into target-lifecycle funds-of-funds – to $3.8 billion – could not offset a decline in inflows into risk-based lifecycle funds-of-funds and non-lifecycle funds-of-funds, according to the report. Total funds-of-funds net flows fell to $3.6 billion. Year-to-date, funds-of-funds have brought in a total of $30 billion in net new cash flows.
Among the largest asset management firms (firms with more than $20 billion in long-term fund assets under management), those garnering the most long-term fund flows were Vanguard ($11.8 billion); PIMCO/Allianz Global ($9.8 billion); Barclays Global Investors ($3.9 billion); JPMorgan Funds ($3.2 billion); Franklin Templeton ($3.1 billion); Fidelity ($2.3 billion); BlackRock ($1.4 billion); and T. Rowe Price ($1.1 billion).
Among smaller-size managers of long-term funds, those that led in total long-term fund flows in September were TCW, Manning & Napier, Lazard Asset Management, Rydex Investments, Van Eck, International Value Advisors, WisdomTree Asset Management, and Metropolitan West.
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