International Stock Funds Take Lead Over U.S. Equities
Taxable bond funds maintain the overall top spot in terms of asset flows in April.
After four months during which U.S. and international-equity funds attracted similar inflows, international equity took the lead in the equity space with a little over $21 billion in total flows.
U.S. equity's winning streak seems to have waned, as the category group received only a meager $280 million in April 2017. It’s too early to tell if investors’ marked preference for international over domestic equity is a new trend or only a one-month stint.
International may have been leading among equity category groups, but taxable bond was still the overall leader with an inflow of almost $26 billion. Sector equity, allocation, and municipal bond all posted outflows for the month.
Other fund-flow trends for the month included:
- In April, total flows were the lowest we've seen so far this year. The positive part of flows was almost equally distributed between taxable bond and international equity.
- In terms of Morningstar Categories, foreign large blend and large blend landed in first and second place on the top-flowing list in April, pushing intermediate bond down to third after several months spent at the top.
- Muni-national short was the Morningstar Category with the largest outflows in April.
- On the passive side, BlackRock/iShares came dangerously close to snatching the top spot from Vanguard: Only $1 billion more and BlackRock would have been in the lead.
- In April, PIMCO along with American Funds, BlackRock, and State Street attracted higher active flows than Vanguard: Vanguard's active flows were actually negative.
Download the complete Morningstar Asset Flows Commentary here.