Mutual fund flow reporting, it turns out, is not the same everywhere you look. BlackRock, Janus, and Pimco [profile] do it one way; DoubleLine [profile], Fidelity, J.P. Morgan, Legg Mason, Vanguard, plus Bloomberg, Morningstar, and the ICI, all do it another way.

Douglas M. Hodge PIMCO Chief Executive Officer

John Gittelsohn of Bloomberg reports on the fund flow reporting debate, and Lisa Abramowicz of Bloomberg also chimes in. The debate boils down to whether or not you should count reinvested dividends and the like as net inflows: BlackRock, Janus, and Pimco do, as such reinvestment results in the creation of new shares; the other fund firms mentioned (as well as the fund watchers) do not count such reinvestment as net inflows because investors aren't actively choosing to do it.

If this debate sounds like deja vu all over again to you, it might be. In January 2016 Pimco reported net inflows for December 2015 thanks to counting reinvestments. Yet at the time Bloomberg and others noted that without reinvestments, the fund wouldn't have net outflows.

The new Bloomberg pieces frame the debate in the context of Pimco's tumultuous several years, notably the last year and a half after the dramatic exit of founder Bill Gross. And Bloomberg also argues that such flow reporting discrepancies make it difficult for investors to compare flows and to understand how their funds are faring.

Left unmentioned in both pieces is another discussion, about the differences between monthly fund flow estimates (like the ones from Morningstar and Bloomberg) and actual monthly fund flow numbers (released by fund firms). DoubleLine has been one of the loudest voices pointing out this distinction and its importance, particularly over short time frames. (Meanwhile, the broader multi-year Morningstar-DoubleLine feud seems to have cooled off.) 

Correction: A prior version of this story mischaracterized DoubleLine's discussion of mutual fund flows estimates from folks like Morningstar.

Edited by: Neil Anderson, Managing Editor


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