June 15, 2011

Morningstar Reports U.S. Mutual Fund and ETF Asset Flows Down Through May 2011

Morningstar, Inc., a leading provider of independent investment research, today reported estimated U.S. mutual fund and exchange-traded fund asset flows through May 2011. Estimated long-term mutual fund flows reached $22.6 billion in May, but this was still the fourth consecutive monthly decline since inflows of $29.8 billion in January. After inflows of $23.3 billion in April, U.S. ETFs lost about $3.1 billion to outflows in May.
Additional highlights from Morningstar's report on mutual fund flows:

• U.S. stock funds recorded their first significant outflows of the year, as the asset class lost $4.5 billion in May.
• Although inflows have slowed, international-stock funds collected assets of about $1.5 billion during the month. Diversified emerging-markets equity funds accounted for the majority of these inflows.

• For the fifth consecutive month, inflows increased for taxable-bond funds. Investors added $20.8 billion in new money to the asset class in May, but with a slightly diminished taste for credit risk. Flows into municipal-bond funds were flat after six consecutive months of outflows.

• Following a steep drop in silver and other commodity prices, commodities funds fell more than five percent on average and experienced outflows of more than $500 million in May.

Additional highlights from Morningstar's report on ETF flows:

• Although three U.S. stock ETFs placed in May's top-five ETFs by inflows, the U.S. stock asset class saw outflows of $2.7 billion during the month.

• Outflows from international-stock ETFs totaled $1.1 billion in May after inflows of $6.8 billion and $7.1 billion in March and April, respectively.

• Commodities ETFs realized the largest outflow of any ETF asset class in May, as investors withdrew $3.7 billion. May's redemptions also marked the single largest net monthly outflow for commodities ETFs.

• Taxable-bond ETFs made a healthy contribution to overall ETF flows again in May. The asset class' inflows of $2.1 billion were second only to alternative ETFs, which also saw inflows of about $2.1 billion.

To view the complete report, please visit http://www.global.morningstar.com/mayflows11

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