Morningstar: It pays to be passive

Morningstar: Both U.S. and International markets were down in August as the financial environment remains unsteady. China’s devaluation of its currency added another worry for investors who are already concerned about high valuations, a six-year bull run, and potential rising interest rates in the U.S.

Despite the dive that the stock market took, though, investors have held their course rather than flocking to safer investments. Taxable-bond flows continued to see large outflows on the active side. Passive taxable-bond funds saw only the smallest of inflows. Only alternative category active funds experienced any inflows among actively-managed funds. Meanwhile, every passively managed category except sector equity received inflows.

U.S. equity flows remained negative overall, while International-equity flows remained positive, though neither to the extent shown over past months.

For Morningstar’s full report on U.S. Asset Flows in August, please click here.