Fidelity funds see outflows for the first time in six months

Fidelity Investments experienced outflows in its long-term mutual funds in October — the first time the fund behemoth has seen net outflows in months. Fidelity had $19 million in net outflows last month, according to data from Morningstar Inc. That’s tiny compared with March, when the equity markets bottomed and the company had net outflows of $1.96 billion, — but it ends a streak of six consecutive months of positive inflows. The hardest-hit funds for the month were Fidelity Magellan (-$380 million), Fidelity Equity Income (-$234 million) and Fidelity Spartan 500 Index (-226 million). Despite the relatively bad month at Fidelity, however, estimated net flows are still a positive $17.1 billion for the year-to-date period ended Oct. 31. Among the largest five fund groups, American Funds from Capital Research & Management Co. remains the only one to experience outflows year-to-date. In October, investors pulled $1.91 billion out of American’s funds, bringing the estimated outflows for 2009 to $21 billion. While at other large fund firms, flows to fixed-income funds have offset outflows in equity funds, American Funds’ fixed-income funds have not had the same pull, according to Morningstar. Pacific Investment Management Co. had the best October, ranking in $10.53 billion in net new cash, followed by The Vanguard Group Inc. ($7.37 billion), J.P. Morgan Funds, an affiliate of JPMorgan Chase & Co. ($3.73) and Franklin Templeton ($3.07 billion). One company that wasn’t among the biggest gainers, but still had a particularly noteworthy month was Dimensional Fund Advisors LP, which saw $646 million of net new cash flow for October. Known for its passive investment strategies and the fact that its funds are sold exclusively through financial advisers, it has seen steady inflows this year, bringing in more than $5.8 billion through October, according to Morningstar. Total net assets at DFA have risen to $96 billion, making it the 12th largest fund group by long-term fund assets.