FUND FLOWS SPOTLIGHT Bond Flows Boost PIMCO Investors appear to be pinning their hopes on active fixed-income managers in an uncertain environment. Advantage: PIMCO. In March, the firm had higher net inflows into its active funds than Vanguard saw into its own active offerings-the first time in a Year-to-Date Flows by Fund Family (USD Bil) 3.3 BlackRock/iShares Alina Lamy is a senior analyst in Morningstar's quantitative research group. Passive Flows Active Flows American Funds offerings overshadowed both, as well as flows into any other family's passive funds. while that a company has come out ahead of Vanguard, even on the active front. After that strong monthly showing, PIMCO's active fund inflows for the first quarter had almost caught up to Vanguard's. However, flows into Vanguard's passive 0.0 57.2 -3.1 Dimensional Fund Advisors 10.1 0.0 Fidelity Investments 11.7 -13.8 Franklin Templeton Advisors J.P. Morgan 0.1 -7.5 0.1 -2.7 PIMCO -0.2 6.1 SPDR State Street Global Advisors 0.5 T. Rowe Price 1.5 Vanguard 10.9 -0.1 109.7 6.7 0 -20 20 40 60 80 100 0 -20 120 20 40 60 80 100 120 Source: Morningstar. Data as of 03/31/2017. Active Versus Passive Fund Strategies The percentage of U.S. actively managed funds that outperformed their respective Morningstar Style Index. 20.6 42.4% 17.4 55.4% 16.3 66.4% 20.8 46.0% 22.1 76.9% 20.3 Core Growth 7.9 2.7% 11.5 17.6% 12.1 8.3% 10.3 8.5% 9.9 38.4% 8.4 32.7% 8.4 27.4% 9.1 50.3% 8.1 Value Core Growth 53.0% 12.0 2.0% 15.1 21.4% 13.6 0.0% 16.1 17.0% 13.7 34.4% 11.5 20.4% 13.6 33.1% 13.2 43.7% 11.9 Value Core Large 14.6% 36.0% Mid 18.5 Large 41.9% Mid 21.1 Small 8.5% Large 15.2 5-Year Mid 3-Year 58.5% Value Index Returns (04/30/2017) Small 1-Year p < 20% p 20 to 40% p > 40% Small Percentage of Actively Managed Funds Outperforming Index: Growth global.morningstar.com/Morningstarmagazine 111http://global.morningstar.com/Morningstarmagazine