April 21, 2017

Lipper U.S. Weekly Fund Flows – Chart of the Week – First Quarter Fund Flows Data Confirm That Investors Continue to Seek Passively Managed Products

by Patrick Keon

For the U.S. mutual fund universe passively managed mutual funds took in $97.5 billion of net new money during first quarter 2017, while actively managed funds saw over $53.3 billion net leave their coffers. This data indicates a continuation of the trend from 2016 in which passively managed products had positive flows of $233.7 billion and actively managed funds had net outflows of $295.0 billion.

The table below provides a look at the five largest net inflows and outflows by mutual funds for Q1. The largest inflows all belonged to Vanguard products, specifically passively managed mutual funds. Vanguard Total Stock Market Index Fund (+$20.0 billion), Vanguard Total International Stock Index Fund ($10.1 billion), Vanguard Total Bond Market II Index Fund (+$8.9 billion), Vanguard Total International Bond Index Fund (+$8.5 billion), and Vanguard 500 Index Fund (+$7.2 billion) led the charge for Q1.  At the company level Vanguard has never recorded an annual net outflow, and it has set personal-best records for the highest annual net inflows in each of the last three years.

Conversely, actively managed products were responsible for all five of the largest negative net flows for Q1. Fidelity Management & Research products were tagged with three of these outflows: Fidelity Contrafund (-$4.3 billion), Fidelity Growth Company Fund (-$3.1 billion), and Fidelity Low-Priced Stock Fund (-$2.5 billion) placed first, third, and fifth in the rankings. Rounding out the funds with the five top net outflows were PIMCO Total Return Fund (-$3.3 billion) and Harbor International Fund (-$2.9 billion). PIMCO Total Return also had the largest net outflows for 2016 (-$16.1 billion) and has not been doing well since prior to Bill Gross’s departure from the fund as it also had annual net outflows of $41.4 billion, $103.7 billion, and $54.2 billion for 2013, 2014, and 2015, respectively.

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