Morningstar: Are you seeing flows?

Morningstar, Inc, a leading provider of independent investment research, today reported estimated U.S. mutual fund asset flows through October 2011. Long-term mutual fund inflows amounted to a mere $745 million in October, but this total masks a huge disparity between flows into stock and bond funds. Combined U.S.-stock and international-stock outflows of $21.1 billion roughly mirrored inflows of $23.7 billion to taxable- and municipal-bond funds.

Additional highlights from Morningstar's report on mutual fund flows:

• Investors redeemed $18.2 billion from U.S.-stock funds in October, the greatest monthly outflow for the asset class since $22.7 billion in July.
• Overall, U.S.-stock outflows reached $53.5 billion for the year to date. Outflows for the asset class are on pace to match or exceed 2010's redemptions of $63.6 billion and 2008's record outflow of $77.4 billion, especially given that outflows from the asset class have picked up in the second half of the year for the last five calendar years.
• Inflows of $2.1 billion to diversified emerging-markets equity funds prevented international-stock funds, which sustained outflows of $2.9 billion in October, from losing even more.  Emerging-markets equity funds have seen strong monthly inflows in 2011 despite the fact that these funds are significantly underperforming U.S.-stock funds.
• Taxable-bond funds, with inflows of $21.7 billion, had their strongest month since September 2010. Intermediate-term and high-yield funds dominated the asset class, taking in a combined $18.6 billion during the month. High-yield bond funds had a record month for inflows, collecting $8.8 billion in new assets.

To view the complete report, please visit http://www.global.morningstar.com/octflows11.