In September, more money flowed into mutual funds than flowed out, breaking a three-month pattern of fund outflows, according to Cerulli Associates’ October report on product trends. Despite the reversal into positive territory, however, mutual fund assets remain at a yearly low of $7.4 trillion.
While September wasn’t a great month in the market, the industry nevertheless experienced net inflows driven by investor interest in international stock and fixed income funds, said Alec Papazian, senior analyst at Cerulli Associates.
According to the report, taxable bond funds garnered top flows among mutual funds in September, drawing $3.5 billion. Those in Morningstar’s intermediate-term bond category led mutual fund flows in September with just under $3 billion while the world bond category led flows year-to-date with $22.7 billion.
For ETFs, fund flows remained positive for the fourth consecutive month. However, total ETF assets plunged for the first time this year below the $1 trillion level, falling to $956 billion. The 8.7% drop in ETF assets in September was worst monthly decline since February 2009 when EFT assets fell 8.8%.
Funds in Morningstar’s taxable bond category garnered top flows among ETF asset classes with just more than $5 billion in September. It displaced U.S. stock category funds as the top asset class for year-to-date flows.
Foreign large-blend and intermediate-term bond Morningstar categories ranked first and second, respectively, for ETF year-to-date flows, with each bringing in more than $7.8 billion.