In August, open-end mutual funds experienced their largest outflows in almost three years while exchange traded funds held on and even attracted slight inflows.
According to Morningstar research, $32.5 billion was funneled out of mutual funds during August, the largest monthly outflow since November 2008, reports Andrew Osterland for InvestmentNews. Almost every asset class was down.
“It’s the continuation of a long trend of investors’ not wanting to take on risk anywhere,” Kevin McDevitt, a Morningstar mutual fund analyst, remarked. [Investors Drain Cash from Equity Mutual Funds]
ETFs saw slightly positive fund flows, totaling $947 million over the month.
“There is a flow of assets from the mutual fund structure to ETFs on some level. They are convenient and adaptable, and the pattern of growth doesn’t show signs of slowing,” Abraham Bailin, a Morningstar ETF analyst, commented.
International equities ETFs experienced the largest outflows of $5.5 billion. Commodity ETF fund flows were relatively flat, with the exception of a $1.9 billion outflow from the popular SPDR Gold Shares (NYSEArca: GLD) and new inflows of $614 into iShares COMEX Gold Trust (NYSEArca: IAU).
Taxable bond ETFs saw the biggest new inflows, taking in $4.3 billion in new money, with around half that money going into the SPDR Barclays Capital 1-3 Month T-Bill (NYSEArca: BIL).
August outflows from U.S. equity mutual funds, though, were $15.5 billion, compared to $22.9 billion in July. “I thought the outflows this month were going to be higher than July, given the volatility in the markets,” McDevitt added.
Outflows from taxable-bond funds were $12 billion for the month, with bank loans and high-yield funds experiencing the largest blow.
Money market funds, on the other hand, saw inflows of $74.8 billion in August, which McDevitt partially attributes to the debt ceiling deal in Congress that restored some confidence in the area.
For more information on mutual funds, visit our mutual funds category.
Max Chen contributed to this article.