Investors turn to fixed income and money market category groups in 2016 looking for less risky assets
Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research, today published its fifth annual Global Asset Flows Report examining worldwide 2016 mutual fund and exchange-traded product (ETP) asset flows.
Worldwide flows decreased to US$728 billion in 2016 from US$1 trillion in 2015, signaling slowing demand for global markets. The U.S. fund industry had new asset flows of US$288 billion, an increase from US$260 billion in 2015. Outside the United States, flows were mostly evenly distributed among the three other major regions analysed by Morningstar: cross-border funds, which are available in multiple markets, Europe, and Asia, with flows of US$138 billion, US$103 billion, and US$134 billion, respectively.
“2016 was a year of modest growth around the world, with heightened uncertainty due in part to extraordinary political events,” Alina Lamy, Senior Markets Analyst for Morningstar, said. “Investors are reacting to this turbulent environment by going back to the basics, looking for less risky assets, positioning their portfolios in expectation of rising interest rates, or selling off equities after a significant run-up. More specifically, fixed income strategies saw the largest flows globally in 2016 and commodity funds experienced a high organic growth rate, with the largest inflows going to the precious metals category.”
Highlights from Morningstar’s 2016 Global Asset Flows Report include:
The Morningstar Global Asset Flows Report is based on assets reported by more than 4,000 fund groups across 85 domiciles. The report represents more than 95,000 fund portfolios encompassing more than 240,000 share classes and includes a global overview as well as analysis about the United States, Europe, Asia, and cross-border offerings. Morningstar estimates net flow for mutual funds by computing the change in assets not explained by the performance of the fund and net flow for ETPs by computing the change in shares outstanding.
View the complete report here.
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Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offers an extensive line of products and services for individual investors, financial advisors, asset managers, retirement plan providers and sponsors, and institutional investors in the private capital markets. Morningstar provides data and research insights on a wide range of investment offerings, including managed investment products, publicly listed companies, private capital markets, and real-time global market data. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than US$200 billion in assets under advisement and management at 31 December 2016. The company has operations in 27 countries.
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