Fund flows in June: Fidelity, Franklin Templeton hit with biggest outflows

Fund flows in June: Fidelity, Franklin Templeton hit with biggest outflows
Vanguard, BlackRock funds see the biggest inflows, largely because they're the largest providers of passively managed funds.
JUL 21, 2016
Investors dropped actively managed mutual funds in May like a snake handler who'd lost his faith, according to Morningstar. Actively managed funds suffered their largest monthly outflows since October 2007 as an estimated $21.7 billion fled the funds. All actively managed funds except municipal bond funds saw net outflows. All passively managed funds, except alternatives, had inflows. Among fund families, active managers Fidelity and Franklin were the biggest losers, while Vanguard and BlackRock saw the largest inflows, because they're the largest providers of passively managed funds. But Fidelity's passive offerings saw inflows of $3.3 billion, thanks in part to its lowering its fees last month. The actively managed fund that gained the most money in June was American Funds American Balanced (ABALX), which had inflows of $1.2 billion. Vanguard Total Stock Market Index (VTSMX) saw inflows of $3.5 billion. Vanguard saw average inflows of $740.5 million in June, or about $2.32 for every person in the U.S. Biggest losers in June: Templeton Global Bond (TPINX), which saw outflows of $1.3 billion, and Powershares QQQ (QQQ), which saw $1.8 billion flee. Investors remained wary of U.S. stocks, despite the strong post-Brexit rally. They pulled another $13 billion from domestic stock funds in June, while adding $7.5 billion to taxable bonds, $7 billion to municipal bonds, and $3.8 billion to commodities. In the past 12 months, $57 billion has fled domestic stock funds, while $45.2 billion has flowed into taxable bond funds. Foreign large blend funds saw inflows of $5.8 billion, even as funds that concentrate on Europe saw outflows of $2.8 billion. The flows are somewhat of a mystery, as Morningstar notes, since most foreign large blend funds invest mainly in Europe. The flow to bonds hasn't been entirely without rewards: The average intermediate-term bond fund has gained 5.3% this year, vs. 5.5% for the average large-company core fund. Investors continued their time-honored tradition of chasing performance. SPDR Gold Shares, up 24.6% this year, saw inflows of $3.5 billion in May.

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