Mutual Funds Have Tepid Inflows in September

Municipal-bond funds saw a seventh consecutive month of outflows. Since March, muni-bond funds have lost $48.1 billion to outflows, surpassing redemptions of $44.8 billion seen from November 2010 through August 2011.

Taxable-bond funds endured their fourth-straight month of outflows, although the pace of selling slowed relative to June’s record outflows.

U.S. equity funds saw their largest monthly outflow for the year to date, but the $3.3 billion in redemptions was small compared with the $9.1 billion average monthly outflow seen by the category group in 2012. International equity funds led all category groups in September with inflows of $7.3 billion. The group also leads all others for the year-to-date period with inflows of $103.2 billion.

Alternative mutual funds had the highest organic growth rate among category groups, but the growth was largely driven by just one fund, MainStay Marketfield. The fund, which has a Morningstar analyst rating of “bronze,” brought in $1.7 billion for the month and $10.2 billion year to date.

Vanguard had the highest provider-level inflows with $3.2 billion, followed by Goldman Sachs and Dimensional Fund Advisors. PIMCO saw outflows of $6.5 billion; since June, heavy outflows of $30.2 billion from PIMCO Total Return have contributed to the firm’s overall outflows of $38.2 billion.

Morningstar estimates net flow by computing the change in assets not explained by the performance of the fund. Morningstar’s complete report about September asset flows can be found here.