Morningstar says fund outflows continued in July

Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research, today reported estimated U.S. mutual fund and exchange-traded fund asset flows through July 2011. July's long-term mutual fund outflows of $17.1 billion marked the greatest monthly net redemption since December 2008, again fueled by the flight out of U.S.-stock funds. The asset class shed $22.9 billion in July, the greatest outflows since investors withdrew $27.9 billion during the peak of the credit crisis in October 2008. U.S. ETFs saw inflows of $17.2 billion in July, building on inflows of $9.8 billion a month earlier. Total ETF assets have increased roughly 25 percent over the trailing 12 months.
Additional highlights from Morningstar's report on mutual fund flows:

• Combined June and July money market outflows approached $150.0 billion, as investor fears about the government's failure to raise the debt ceiling and a potential credit freeze likely led many to shift assets to the greater liquidity of savings accounts.

• International-stock funds shed $3.7 billion in July, but inflows of $1.3 billion into diversified emerging-markets stock funds curtailed greater losses. Foreign large-cap, world-stock, and moderate-allocation funds all sustained outflows of at least $2.0 billion.

• Taxable-bond funds collected inflows of $8.9 billion in July, while municipal-bond fund flows were relatively flat for the third consecutive month. Flows into the national municipal-bond categories continued to strengthen, while single-state categories again saw outflows.

• After interest picked up in June, investors fled government-bond funds in July. After contributing $1.5 billion to these funds a month earlier, investors pulled $1.3 billion from the three main government-bond categories in July.

Additional highlights from Morningstar's report on ETF flows:

• U.S.-stock ETFs collected inflows of $6.4 billion in July to top all other ETF asset classes for the second consecutive month.

• After outflows of $3.7 billion and $892 million in May and June, respectively, commodities ETFs reversed course in July and recorded inflows of $3.7 billion. Precious-metals offerings accounted for the majority of inflows into commodities ETFs.

• Taxable-bond ETFs made another solid contribution to overall ETF inflows in July, with $3.3 billion in new assets. The asset class has not seen a net monthly outflow since December 2010.

• International-stock ETFs built on June's inflows of $2.4 billion with inflows of $3.8 billion in July.

To view the complete report, please visit http://www.global.morningstar.com/julyflows11 . For more information about Morningstar Fund Flows, please visit http://global.morningstar.com/fundflows .