According to a Morningstar, Inc. (NASDAQ:MORN) report investors redeemed $58 billion from long-term mutual funds and ETFs in June. Bond mutual funds and ETFs had record outflows of $68 billion (surpassing the $36 billion redeemed in October 2008) as investors were concerned with the potential winding down of the Federal Reserve’s bond purchase program and resulting upward pressure on interest rates. Equity fund flow held up relatively well, but there is no evidence of bond redemptions rotating into equities.
ETFs had outflows for the first time since March 2011 as investors redeemed both equity and fixed income funds. However, flows held up relatively stronger than mutual funds with $10 billion of outflows.
ETF’s had outflows for the first time since May 2011
The exodus from bond funds highlights the month with $60B of outflows. Investors pulled funds as the Federal Reserve indicated it may move closer to tapering Quantitative Easing. Money market funds had net outflows of -$27B as flows remain volatile month to month. ETFs had outflows for the first time since May 2011 as investors redeemed money from both equity and fixed income ETFs.
Morningstar, Inc. (NASDAQ:MORN)’s data includes only open-end and exchange-traded funds while excluding separate accounts and closed-end funds. Therefore this data represent only a subset of total managed AUM and provide a decent proxy for overall trends.
Fund Flow for BlackRock and T. Rowe Price
BlackRock, Inc. (NYSE:BLK) and T. Rowe Price Group, Inc. (NASDAQ:TROW) do not report monthly AUM, but key takeaways from the month, based on available data, are as follows:
For BlackRock, Inc. (NYSE:BLK), the flow picture is challenging to track accurately given that the products utilized by its large institutional client base are not captured in the Morningstar, Inc. (NASDAQ:MORN) data. However, from available ETF data, iShares had a rough month with $10.7 billion of outflows. Fixed income ETFs drove overall flows with $6.4 billion of outflows. Equity ETFs had outflows of $3.9 billion. BlackRock mutual funds had $300 million of outflows, which is below recent levels owing to fixed-income outflows for the first time since August 2011.
T. Rowe Price Group, Inc. (NASDAQ:TROW) fund flows were lower than expected in June, particularly in bond/money market funds. They estimate sponsored equity/balanced mutual fund inflows of $900 million in the month and bond/money market outflows of $500 million.