A fixed income ETF startup in the Midwest led the smallest fund firms last month.

John Orner Aware Asset Management President, Chief Investment Officer

This article draws from Morningstar Direct data on February 2020 open-end mutual fund and ETF flows, excluding money-market funds and funds of funds. More specifically, this article focuses on the 513 firms (up eight from January) with less than $1 billion each in fund AUM. 240 of those firms gained net inflows in February, down from 247 in January.

Aware brought in an estimated $75 million in net inflows in February, more than any other sub-$1-billion-AUM fund firm and up from $1 million in January outflows. Other big February inflows winners included: DF Dent, $63 million (up from $24 million); Toroso, $55 million (down from $116 million); MainGate, $44 million (down from $53 million); and Liquid Strategies' Overlay Shares, $42 million (down from $58 million).

Proportionately, setting aside one February newcomer (TrueMark), it was Axonic that led the smallest fund firm pack, with estimated net inflows equivalent to 71.4 percent of its AUM, up from negligible January inflows. Other big January inflows winners included: Absolute Investment Advisers, 51.7 percent (which entered in January); Infusive, 36.3 percent (up from flat flows); Oelschlager Investments, 34.6 percent (up from flaw flows); and Goehring and Rozencwajg, 27.8 percent (up from 8 percent).

On the flip side, February was a rough month for Highland, which suffered an estimated $100 million in outflows, more than any micro fund firm but down from $132 million in January. Other big February outflows sufferers included: Lyrical, $76 million (down from $6 million in net inflows); Thomas White, $57 million (up from $19 million); LS, $45 million (down from $55 million); and Hamlin, $41 million (up from $4 milion).

Thomas White led the smallest fund firm outflows pack proportionately, with estimated net February outflows equivalent to 49.9 percent of its AUM, up from 10.3 percent in January. Other big February outflows sufferers included: LS, 30.7 percent (up from 27.9 percent); RVX, 25.9 percent (down from negligible inflows); Volshares, 19.1 percent (down from 46.5 percent); and Becker, 16.3 percent (up from 9.6 percent).

As a group, the 513 fund firms with less than $1 billion each in fund AUM brought in an estimated $140 million in net February inflows, equivalent to about 0.15 percent of their combined AUM and accounting for 0.55 percent of net industry inflows. That's down from $633 million in January, which accounted for 0.7 percent of micro fund firms' combined AUM and 0.76 percent of net industry inflows.

Across the entire industry, the 769 fund firms (two more than in January) tracked by the M* team brought in a combined $25.459 billion in net February inflows, equivalent to 0.13 percent of industry AUM and down from $83.274 billion in January. Passive funds brought in an estimated $13.784 billion in net February inflows (down 79 percent from $65.959 billion in January), while active funds brought in $11.675 billion in net February inflows (down 33 percent from $17.315 billion in January). 

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