Morningstar reported estimated U.S. mutual fund and exchange-traded fund asset flows through May 2010. Redemptions of nearly $15.0 billion from domestic-equity funds, the largest monthly outflow since March 2009, contributed to outflows of $13.2 billion for all long-term mutual funds in May. The European economic woes that dominated the headlines throughout the month brought an end to 13 consecutive months of steady inflows for international-stock funds. The asset class saw outflows of nearly $6.0 billion in May. Despite the market malaise, U.S. ETFs saw inflows of $4.8 billion in May, bringing year-to-date net inflows to $24.7 billion. The ETF industry had roughly $792.6 billion in assets as of the end of May.
Additional highlights from the report on mutual funds:
• While most bond categories saw positive flows in May, all but 34 of the 146 high-yield bond funds registered outflows in May. A total of $6.3 billion exited the category in May, which is the largest monthly outflow since Morningstar began keeping record in 1998. Conversely, short-term bond funds attracted $4.0 billion in new assets during the month.
• Record flows into emerging-markets bond funds suggest that investor perception about the risks of emerging-markets debt has changed. Flows into emerging-markets bond funds have increased steadily since mid-2009.
• Although money market funds saw outflows of $20.6 billion in May, the pace of redemptions slowed significantly.
• Excluding target-date funds, approximately 80 new funds have launched in 2010. Managed by star fixed-income manager Jeffrey Gundlach, the top newcomer is DoubleLine Total Return, which has amassed total net assets of $610 million since its early April debut.
Additional highlights from the report on ETFs:
• Commodities, with more than $5.6 billion in net inflows, topped all ETF asset classes in May. SPDR Gold Shares GLD, which has about $50 billion in total net assets and holds more than 1,200 tons of gold bullion, led the way.
• United States Oil USO gathered assets of $751 million in May, as the daily headlines on the oil spill in the Gulf of Mexico sparked newfound interest in speculating on crude.
• Taxable-bond ETFs saw inflows of $2.3 billion in May, led by iShares Barclays 1-3 year Treasury Bond SHY with $906 million in net inflows.
• Domestic equity was the only asset class among ETFs to experience net redemptions in May, with outflows of $4.7 billion.
To view the complete report, please visit http://www.global.morningstar.com/mayflows10.
