Morningstar Sees Largest Mutual Fund Inflow Since 2007

September 15, 2009 ( - Investors poured more than $54 billion into U.S. open-end mutual funds in August - the largest inflow since February 2007, according to Morningstar.

Through August 2009, more than $226 billion has flowed into U.S. open-end funds, meaning fund firms are close to making up the ground lost in the second half of 2008, when investors pulled $251 billion out of mutual funds, according to Morningstar commentary.

However, Morningstar pointed out that it does not signal renewed enthusiasm for equities, as 60% (or $31.6 billion) of August’s flows went to taxable-bond funds, and municipal-bond funds made up another 20% (or almost $10 billion). U.S. equity funds posted a $1.9 billion inflow for the month, and international equity funds gained $7.7 billion.

PIMCO Funds was the most popular fund group in August, taking in $9.3 billion in assets, followed by Vanguard, which posted a $9.1 billion net intake. American Funds continued to lose ground, as investors pulled $2.6 billion out of the complex in August, bringing its year-to-date outflows to $17.4 billion.

PIMCO Total Return has been the top-selling fund throughout 2009, and August proved to be its best month yet, with almost $5.5 billion in inflows.