Fund Flows: "These Numbers are Mindblowing"

That money quote comes from a Morningstar analyst looking at the incredible exodus from actively-managed mutual funds in June.  The jig is up and investors are realizing that for a third of the cost they can buy passive funds and pretty much outperform everyone.

Jessica Toonkel has the story at Investment News:

U.S. investors pulled $19 billion more out of actively managed U.S. stock funds in June than they put in, while U.S. index stock funds saw $1.1 billion in net inflows. In March 2009, when the S&P 500 fell to a 12-year low of 676.53, flows out of active funds and into passive funds combined were $20.7 billion, according to Morningstar Inc. That month, investors pulled $18.3 billion out of actively managed U.S. stock funds than they put in, and passively managed equity funds saw $2.4 billion in inflows.

I’m not sure if the fact that these stats mirror my own actions for client portfolios should make me feel comfortable or uncomfortable.  I find myself working with only a handful of active managers these days, most of which do something special that I simply cannot replicate with indexes or my own trading.

Anyway, there’ll be no joy in Boston as these numbers make the rounds in the mutual fund complex.


June’s sum of U.S. equity fund outflows, index fund inflows highest since ‘09 (Investment News)

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