Morningstar - Q2 2021 - 79
FUND FLOWS SPOTLIGHT
Investors Reposition for Growth and Inflation
Financial stock funds were in the lead for
the year to date after their fourth-straight month
of inflows. In February, energy funds had their
strongest showing since December 2014,
and natural resources funds, which tend to focus
on materials stocks (such as mining and
chemicals companies), had their highest monthly
inflow in the past decade.
In the first two months of 2021, categories that
might weather an inflationary environment
better than most had the highest organic growth
rates. Prospects of a new federal stimulus
package along with lower coronavirus case counts
likely spurred optimism about future
economic activity, while sparking concerns
about higher inflation.
Inflation-protected bond funds collected nearly
$7 billion in February, a category record. Bank-loan
funds, which invest in securities with floating
interest rates, marked the third month in a row of
inflows after a 25-month stretch of outflows.
Adam Sabban, CFA, and Supreet Grewal are manager
research analysts with Morningstar Research Services LLC.
YTD Organic Growth Rate
YTD Estimated Net Flow
25%
$15,000M
13,158
20.6
20
12,000
11,170
15
15.1
14.3
12.9
12.3
9,000
8,415
10
6,000
4,580
4,454
4,508
6.7
5
6.5
0
Financial
Commodities
Broad Basket
Equity
Energy
Natural
Resources
Bank Loan
6.2
2,861
2,408
3,000
0
Industrials
Consumer
Cyclical
InflationProtected Bond
Source: Morningstar Direct. Data from 01/01/2021 to 02/28/2021.
Active Versus Passive Fund Strategies The percentage of U.S. actively managed funds that outperformed their respective Morningstar Style Index.
< 20%
> 40%
Index Returns (03/31/2021)
49.0%
74.9
54.1%
68.3
50.3%
73.3
39.5%
103.3
68.4%
82.2
75.2%
81.9
Value
Core
Growth
55.7%
10.2
25.7%
16.4
30.4%
21.8
74.3%
8.6
29.4%
13.4
29.5%
22.4
58.9%
9.0
48.8%
12.0
56.4%
18.5
Value
Core
Growth
55.4%
11.4
19.7%
16.2
29.5%
20.8
56.4%
11.1
32.9%
13.8
29.5%
20.6
Mid
55.8
68.6%
10.3
54.7%
13.0
57.2%
19.4
Small
73.4%
Large
57.1
Mid
50.3%
Small
46.1
Large
79.9%
5-Year
Mid
3-Year
Small
1-Year
20 to 40%
Value
Core
morningstar.com/lp/magazine
Large
Percentage of Actively Managed Funds Outperforming Index:
Growth
79
http://www.morningstar.com/lp/magazine
Morningstar - Q2 2021
Table of Contents for the Digital Edition of Morningstar - Q2 2021
Contents
Morningstar - Q2 2021 - Cover1
Morningstar - Q2 2021 - Cover2
Morningstar - Q2 2021 - 1
Morningstar - Q2 2021 - 2
Morningstar - Q2 2021 - Contents
Morningstar - Q2 2021 - 4
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Morningstar - Q2 2021 - Cover3
Morningstar - Q2 2021 - Cover4
Morningstar - Q2 2021 - M1
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