Significant net redemptions - US Monthly Fund Highlights - June 2018 Key Trends

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Active long-term funds experienced significant net redemptions in June of US$18.5 billion, a substantive reversal from the US$615 million in inflows they garnered in May.

June’s outflows dragged active fund flows for the first half of the year into the negative at US$11.4 billion. Positive flows into active funds in June were limited to fixed-income funds. Taxable Bond funds led investor demand at US$5.7 billion, followed by Tax-Free Bond funds at US$1.5 billion.

PIMCO was the top inflow-gathering manager among active Taxable Bond funds at US$3.7 billion, while Edward Jones saw the second highest Taxable Bond flows at US$2.2 billion. Vanguard and Nuveen were the leading contributors to active Tax-Free Bond flows at US$607 million and US$531 million, respectively.

Net deposits into passive funds saw a drastic decline during June, falling to US$6.0 billion from US$35.5 billion in May. ETPs were chiefly responsible for this decline, experiencing net redemptions of US$5.2 billion in June after net deposits of US$25.5 billion in May. Passive mutual funds increased net flows over the course of June, growing to US$11.2 billion from US$10.0 billion in May. Positive flows into passive funds were also limited to bond funds during June.

Taxable Bond funds grew net new flows to US$12.5 billion, from US$8.9 billion in May. Tax-Free Bond funds also experienced increased net new flows for the month, growing to US$1.2 billion (versus US$509 million last month).

Taxable Bond had a wide lead in fund flows during the first half of 2018, with combined active and passive flows totaling US$131 billion. International Equity was the second highest inflow fund type during 1H’18 at US$85.7 billion. Passive funds had a slight lead among YTD Taxable Bond flows at US$69.2 billion compared to US$61.7 billion for active funds.

PIMCO was the leading inflow-gathering active Taxable Bond manager during the first half of the year at US$16.8 billion. PGIM Investments experienced the second highest inflows at US$6.9 billion. Vanguard’s YTD passive flows were US$30.7 billion, nearly twice that of the second highest inflow-gathering passive Taxable Bond manager, BlackRock (US$15.8 billion).

Money Market funds saw flows plummet in June, experiencing US$33.3 billion in net outflows after seeing US$52.7 billion in net inflows during May. Taxable Money Market funds led net deposits during the month at US$7.9 billion, while Government Money Market funds experienced the strongest redemptions at US$35.4 billion.