Active equity funds bled $41.4 billion in 2019: Morningstar

Active equity funds bled $41.4 billion in 2019: Morningstar
In sixth straight year of net inflows, passive funds pulled in $162.8 billion
JAN 17, 2020

While active U.S. equity funds saw $41.4 billion in outflows in 2019, passive U.S. equity funds had $162.8 billion in inflows, according to estimates of net flows by Morningstar.

For each category, 2019 marked the sixth consecutive year of their respective outflows and inflows.

Morningstar said that passive U.S. equity funds now account for a 51.2% market share based on total assets. The research and data provider estimates net flows for mutual funds by computing the change in assets not explained by the performance of the fund, and net flow for outstanding U.S. exchange-traded fund shares and reported net assets.

From its year-end report on the fund industry, Morningstar also noted that long-term funds collected $414.6 billion in 2019 — more than double 2018’s $168.3 billion.

Money market funds received $547.5 billion in inflows, the group's best year since 2008’s record $593.6 billion.

Thanks to rising markets, long-term assets grew in 2019 to $20.7 trillion from $16.9 trillion.

The strong long-term inflows in December and for all of 2019 were due almost entirely to record inflows for both taxable-bond and municipal-bond funds, which collected $413.9 billion and $105.5 billion, respectively, for the year, Morningstar said, noting that passive taxable bond funds now account for about a third of that market.

Among the 10 largest U.S. fund families, Vanguard saw $183.3 billion in inflows for 2019, which topped 2018’s $162.9 billion. The firm's long-term assets grew by $1.1 trillion to $5.3 trillion — a 25.7% market share.

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