2011 was a tough year for active mutual funds, U.S. stock mutual funds, money market mutual funds, and especially for American Funds' giant Growth Fund of America.

Last week in the Morningstar Direct Fund Flows Update, editorial director Kevin McDevitt revealed that Capital Group's American Funds suffered $81.5 billion in long-term mutual fund net outflows in 2011, including $33.1 billion in net outflows from Growth Fund of America alone. That puts the giant fund's long-term net outflows ahead of every other mutual fund firm, and that contributed more than one-third of the net $84.692 billion in outflows from U.S. stock funds.

InvestmentNews highlighted the Morningstar report.

Money market funds suffered $100.372 billion in net outflows, even more than U.S. stock mutual funds, and $9.4 billion net flowed out of actively managed funds.

On the flip side, 2011 was a good year for long-term, passive mutual funds, which brought in $76.4 billion net and upped their market share to 14.8 percent of long-term mutual fund assets. And in a separate Morningstar Direct Fund Flows Update report on exchange-traded funds, ETF analyst Abraham Bailin noted that $121.379 billion net flowed into long-term ETFs last year. Long-term, taxable bond mutual funds saw the biggest net inflows of any category, $130.197 billion.

Big winners, then, included passive giant Vanguard, with $43.7 billion in net long-term inflows. And fixed-income specialist DoubleLine brought in $12.4 billion, growing 301.6 percent.

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Editors' Note: This article, originally published in the morning on January 17, was updated on January 18 to reflect corrected data from Morningstar. The following data mentioned in the article has been updated:

• -the 2011 year-end market share for passively-managed, long-term mutual funds;
  
  
• -the 2011 net outflows for U.S. stock mutual funds;
  
  
• -the 2011 net outflows money market mutual funds;
  
  
• -the 2011 net outflows for long-term, actively-managed mutual funds;
  
  
• -the 2011 net inflows for long-term, passively-managed mutual funds; and
  
  
• -the 2011 net inflows for long-term, taxable bond mutual funds.

Morningstar spokeswoman Carling Spelhaug sent MFWire.com the following correction on January 18:

I wanted to let you know that we detected an error in the domestic-stock fund flow data that we reported last Friday in our December mutual fund flows press release and report. It came to our attention that the Vanguard Total Stock Market Index was incorrectly identified as a fund of funds in our database, which excluded it from the data used to compile the report.

We apologize for this error and any inconvenience it may cause. The affected data that was highlighted in the original press release is listed below. In addition, any figures in the report that cited U.S.-stock flows, passive flows, or Vanguard’s fund family data also changed. Here’s a link to the updated report: http://www.global.morningstar.com/decflows11.

Corrected data from the press release:

• -Long-term mutual funds had outflows of $9.8 billion in December rather than $10.6 billion, and $67.1 billion for the year rather than $55.6 billion.
  
  
• -U.S.-stock outflows for December were $17.7 billion rather than $18.5 billion and $84.7 billion rather than $98.8 billion for the full year.
  
  
• -International-stock funds ended the year about $85.2 billion ahead of U.S.-stock funds in 2011, rather than $99.2 billion.
  
  
• -Inflows for passively managed long-term funds in 2011 were $76.4 billion rather than $62.2 billion, and actively managed funds shed about $9.4 billion in 2011 rather than $6.7 billion.
  
  
• -Vanguard Total Stock Market Index had inflows of $835 million in December, and Vanguard’s total inflows for the year were $43.7 billion rather than $29.5 billion.

 

Edited by: Neil Anderson, Managing Editor


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