Morningstar Reports U.S. Mutual Fund Asset Flows Through September 2012

Morningstar today reported estimated U.S. mutual fund asset flows through September 2012. Investors added $16.5 billion to long-term open-end funds, as inflows of $29.9 billion into taxable-bond funds overcame redemptions of $16.8 billion from U.S.-stock funds. September was the 17th consecutive month of outflows for U.S.-stock funds and further evidence of investors' preference for the perceived safety of fixed income over equities.

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

• Following the Fed's announcement that it will keep short-term rates near zero through mid-2015, investors revealed a willingness to take on risk within fixed income. Riskier categories such as emerging-markets bond, high-yield bond, and bank-loan each saw inflows of approximately $2.0 billion during the month.
• The largest fixed-income category, intermediate-term bond, collected new assets of more than $13.2 billion, bolstered by inflows of $2.8 billion for PIMCO funds and more than $1.4 billion for DoubleLine.
• Within equities, nearly every category saw outflows, led by large-growth with redemptions of $5.0 billion. While open-end equity mutual funds lost assets of $16.8 billion, nearly an equal amount flowed into equity exchange-traded funds.
• Dividend-focused funds have attracted $17.3 billion in assets this year, even as U.S.-stock funds lost $82.6 billion overall.