FYI: After outflows for most of last year, the tide turned for taxable-bond funds; they once again
became popular with investors in February 2016, after the January sell-off in the stock market.
The taxable-bond Morningstar category group received the highest inflow of all category
groups in May: $15.4 billion. Municipal-bond funds took second place, with an $8.2 billion
inflow. The taxable-bond category saw its inflow almost evenly distributed between active and
passive funds. For muni-bond funds, active funds received the bulk of the inflows, which makes
sense given the scarcity of passive muni-bond fund options out there.
U.S. equity remained stuck in its pattern of passive inflows and active outflows. Worries over
weakness in the most recent employment report were offset by hopes that the same
weakness might lead the Federal Reserve to postpone raising interest rates. (This will be
discussed at the next meeting on June 14–15.)
International equity sustained outflows across the board, active and passive, prompted by
concerns over potential disruption in Europe if Britain decides to leave the European Union at
the upcoming June 23 referendum. May’s $6.6 billion outflow was the worst since August
2011 for international equity.
Regards,
Ted
http://corporate.morningstar.com/US/documents/AssetFlows/AssetFlowsJune2016.pdf
