Morningstar Magazine - October/November 2017 - 95
FUND FLOWS SPOTLIGHT
Small Shifts in the Active vs. Passive Trend
The taxable-bond and international-equity
Morningstar category groups attracted the most
flows in July; $34.7 billion and $23 billion,
respectively. For both, the majority of these flows
came from passive funds. Active flows,
however, were also positive and considerable
in size. In fact, international-equity funds
bucked a longer-term trend of outflows from
active offerings.
Alternative and commodities funds suffered
outflows overall, but saw inflows to active
management in July-a reversal of the customary
pattern lately.
U.S. equity, overall, remained in outflow territory,
dragged by $19.6 billion in redemptions
from active funds. However, passive U.S. equity
funds still received $10.8 billion in inflows.
Alina Lamy is a senior analyst in Morningstar's quantitative
research group.
Total (Active + Passive)
Active
Passive
Estimated Net Flows $Mil
Estimated Net Flows $Mil
Estimated Net Flows $Mil
U.S. Category Group
July
U.S. Equity
1-Year Assets $Bil
July
-8,822
38,208
7,284
1,521
27,710
862
-446
International Equity
22,951
153,768
2,929
Allocation
-2,594
-37,106
Taxable Bond
34,700
Municipal Bond
Alternative
1-Year Assets $Bil
1-Year Assets $Bil
3,862
10,805
283,057
3,422
-27,591
402
1,968
55,301
460
7,083
-24,600
1,700
15,868
178,368
1,229
1,315
-2,798
-38,259
1,248
204
1,153
67
311,142
3,541
13,624
122,117
2,478
21,077
189,025
1,063
2,885
10,115
680
2,481
4,338
648
404
5,776
32
-423
-8,717
212
10
-7,894
165
-433
-823
46
Commodities
-1,871
-6,177
90
1,007
2,263
26
-2,878
-8,440
63
All Categories (total)
48,348
488,942
16,912
1,333 -214,476
10,529
47,014
703,418
6,383
Sector Equity
-19,627 -244,850
July
Source: Morningstar. Data as of 07/31/2017.
Active Versus Passive Fund Strategies The percentage of U.S. actively managed funds that outperformed their respective Morningstar Style Index.
12.7
54.8%
11.2
38.5%
16.1
67.9%
10.2
76.3%
10.3
55.5%
15.1
Core
Growth
7.0
1.2%
11.4
27.8%
10.9
16.7%
8.0
16.8%
7.7
44.6%
7.5
43.0%
5.7
39.6%
6.7
47.7%
8.0
Value
Core
Growth
52.0%
12.1
2.3%
15.8
32.2%
14.9
0.0%
16.3
10.6%
14.4
32.1%
13.2
36.2%
13.0
38.3%
13.2
43.2%
13.0
Value
Core
Large
33.9%
29.3%
Mid
20.9
Large
30.4%
Mid
19.2
Small
8.6%
Large
11.8
5-Year
Mid
3-Year
61.4%
Value
Index Returns (08/31/2017)
Small
1-Year
p < 20% p 20 to 40% p > 40%
Small
Percentage of Actively Managed Funds Outperforming Index:
Growth
global.morningstar.com/Morningstarmagazine
95
http://global.morningstar.com/Morningstarmagazine
Table of Contents for the Digital Edition of Morningstar Magazine - October/November 2017
Contents
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