Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research, today reported estimated U.S. mutual fund and exchange-traded fund (ETF) asset flows for October 2014. On the heels of sizable outflows of $18.7 billion in September, active taxable-bond funds shed another $23.1 billion in October. However, when PIMCO Total Return’s outflows are excluded, active taxable-bond funds collected inflows of $9.2 billion. Passive taxable-bond flows were also strong. 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 ETFs by computing the change in shares outstanding.
Additional highlights from Morningstar’s report about U.S. asset flows in October:
- Active U.S. equity mutual funds and ETFs saw outflows for the eighth consecutive month, while passive U.S. equity funds had inflows for the ninth straight month. Over the last 12 months, overall long-term passive flows have been nearly five times as large as active flows.
- PIMCO’s firm-level outflows of $49.4 billion were larger in October than in September, as investors continued to react to Bill Gross’ departure. Janus, with Gross on board, experienced its first month of net inflows in October after 36 consecutive months of redemptions. But Gross’ new fund, Janus Global Unconstrained Bond, accounted only for about one-third of Janus’ October inflows.
- Four PIMCO funds were among the five active funds with the greatest redemptions in October. Among top asset-gathering active funds for the month, fixed-income offerings led the way. Metropolitan West Total Return Bond, which has a Morningstar Analyst Rating™ of Gold, took in $6.7 billion, followed by Gold-rated Dodge and Cox Income with $4.2 billion and unrated BlackRock Strategic Income with $2.3 billion. On the passive side, Vanguard Total Bond Market Index had another strong month with inflows of $5.5 billion.