Morningstar Reports U.S. Mutual Fund and ETF Asset Flows for September 2016

CHICAGO, Oct. 18, 2016 /PRNewswire/ -- Morningstar, Inc. MORN, a leading provider of independent investment research, today reported estimated U.S. mutual fund and exchange-traded fund (ETF) asset flows for September 2016. Assets continued to exit active U.S.-equity funds, with an estimated $23.6 billion in outflows in September, slightly down from August's $25.4 billion. U.S. equity attracted steady flows on the passive side, with an estimated inflow of $19.3 billion in September, up from August's $16.4 billion. Morningstar estimates net flow for mutual funds by computing the change in assets not explained by the performance of the fund and net flow for ETFs by computing the change in shares outstanding.

Highlights from Morningstar's report about U.S. asset flows in September:

• International equity experienced a slowdown in flows on the passive side: only $2.1 billion in September compared with $6.4 billion in August, caused by a decrease in emerging-markets inflows seen during the previous few months.
• Taxable-bond funds continued their undisputed rule as the category group with the highest inflows in September, receiving $10.4 billion on the active side and $12.9 billion on the passive side.
• The MSCI Emerging Markets Index posted a 1.3 percent return in September. Flows into emerging-markets funds remained positive, but diminished considerably from July and August.
• The top Morningstar category remains unchanged from August: intermediate-term bond. However, intermediate-term bond was joined by the short and ultrashort bond categories on the list of top inflows. The bottom five categories were also little changed from last month, with large growth, world allocation, and Europe stock sustaining the largest outflows. WisdomTree Europe Hedged Equity and its Deutsche counterpart, Deutsche X-trackers MSCI Europe Hedged Equity, continued to suffer outflows.
• In September, all top 10 providers except Vanguard and State Street, which are known as passive specialists, experienced outflows on the active side.
• Vanguard continues to be the top passive provider in September with nearly $21.0 billion in inflows. State Street fell to fourth place behind Vanguard, iShares, and Fidelity, with $1.5 billion in inflows.
• Fidelity continued to receive inflows to its passive products after lowering fees three months ago. However, the company still experienced a $3.4 billion outflow on the active side.
• Prudential Total Return Bond, an intermediate-term bond fund that carries a Morningstar Analyst Rating™ of Bronze, emerged as the leader in top-flowing active funds.
• After garnering an $11.1 billion inflow in July, SPY attracted $0.6 billion in August, which is more in line with the general trend of investors moving away from the U.S. market. September's $1.2 billion outflow could indicate that active managers were temporarily placing assets in SPY before reallocating to other asset classes.

To view the complete report, please click here. For a video summarizing the report, click here. For more information about Morningstar Asset Flows, please visit http://global.morningstar.com/assetflows. 

The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

About Morningstar, Inc.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offers an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on nearly 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $185 billion in assets under advisement and management as of June 30, 2016. The company has operations in 27 countries.

Analyst Ratings are subjective in nature and should not be used as the sole basis for investment decisions. Analyst Ratings are based on Morningstar analysts' current expectations about future events and therefore involve unknown risks and uncertainties that may cause Morningstar's expectations not to occur or to differ significantly from what was expected. Morningstar does not represent its Analyst Ratings to be guarantees nor should they be viewed as an assessment of a fund's or the fund's underlying securities' creditworthiness. This press release is for informational purposes only; it should not be considered an offer or solicitation to buy or sell the mutual funds noted within. 

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Media Contact:
Sarah Pellegrino, +1 312 244-7358 or sarah.pellegrino@morningstar.com

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SOURCE Morningstar, Inc.