A pair of specialty mutual fund and ETF shops in the leveraged and inverse index fund space dominated midsize inflows in a rough month and quarter for the industry.

Michael Lynn Sapir ProFunds, ProShares Chairman, CEO

This article draws from Morningstar Direct data on March and Q1 2020 open-end mutual fund and ETF flows, excluding money-market funds and funds of funds. More specifically, this article focuses on the 68 firms (down from 73 in February) with between $10 billion and $100 billion in fund AUM. Ten of those firms gained Q1 net inflows, and only seven gained March net inflows.

ProShares and ProFunds took the midsize lead in the first quarter, with an estimated $5.236 billion in net inflows. Other big Q1 inflows winners included: Rafferty's Direxion, $4.688 billion; WCM, $1.673 billion; First Trust, $702 million; and Edgewood, $638 million.

Proportionately, Direxion led the midsize fund firm pack last quarter, with estimated net inflows equivalent to 45.4 percent of its AUM. Other big Q1 inflows winners included: ProShares, 15.9 percent; WCM, 14.9 percent; Brown Advisory, 5.5 percent; and Edgewood, 4.1 percent.

ProShares also led the way in March alone, thanks to an estimated $4.218 billion in net inflows, up from $368 million in February. Other big March inflows winners included: Direxion, $3.539 billion (up from $755 million); WCM, $957 million (up from $435 million); Edgewood, $178 million (up from $25 million); and Touchstone, $86 million (down from $411 million).

Proportionately, Direxion kept the lead among midsize fund firms last month, thanks to estimated inflows equivalent to 34.3 percent of its AUM, up from 5.9 percent in February. Other big March inflows winners included: ProShares, 12.8 percent (up from 1.1 percent); WCM, 8.5 percent (up from 3.7 percent); Edgewood, 1.1 percent (up from 0.1 percent); and Brown Advisory, 0.6 percent (down from 1.9 percent).

On the flip side, Q1 was a rough one for Morgan Stanley's funds, which suffered an estimated $7.61 billion in net outflows, more than any other midsize fund firm. Other big Q1 outflows sufferers included: DoubleLine, $5.366 billion; Putnam, $5.008 billion; Harris' Oakmark, $4.626 billion; and American Century, $3.83 billion.

Morgan Stanley also led the midsize outflows pack proportionately, thanks to estimated net Q1 outflows equivalent to 17.4 percent of its AUM. Other big Q1 outflows sufferers included: Matthews Asia, 12 percent; Guggenheim, 10.6 percent; Oakmark, 10.5 percent; and Carillon Tower, 10.4 percent.

Morgan Stanley's March was even rougher than its overall Q1. Its mutual fund business suffered an estimated $8.121 billion in net March outflows, more than any other midsize fund firm and up from $762 million in February. Other big March outflows sufferers included: DoubleLine, $7.123 billion (down from $886 million in net inflows); Putnam, $5.717 billion (down from $732 million in net inflows); Goldman Sachs, $5.418 billion (down from $1.433 billion in net inflows); and Eaton Vance (including Calvert), $3.62 billion (down from $545 million in net inflows).

Proportionately, Morgan Stanley also led the March outflows pack among midsize firms, thanks to estimated net outflows equivalent to 18.6 percent of its AUM, up from 1.4 percent in February. Other big March outflows sufferers included: DoubleLine, 8.8 percent (down from 0.9 percent in net inflows); Putnam, 8.6 percent (down from 0.9 percent in net inflows); AQR, 8 percent (up from 1.4 percent); and Amundi Pioneer, 7.9 percent (down from 0.7 percent in net inflows).

As a group, the 68 midsize fund firms suffered an estimated $88.294 billion in net Q1 outflows, equivalent to 3.56 percent of their combined AUM and accounting for 39.45 percent of net industry outflows.

Those 68 midsize fund firms suffered an estimated $89.268 billion in net March outflows, equivalent to 3.6 percent of their combined AUM and accounting for 27.35 percent of industry net outflows. That's down from $923 million in net February midsize inflows.

Across the entire industry, the 770 fund firms (one more than in February) tracked by the M* team suffered a combined $223.83 billion in net Q1 outflows, equivalent to 1.31 percent of their combined AUM. 291 firms gained net Q1 inflows.

In March alone, the industry suffered an estimated $326.378 billion in net outflows, equivalent to 1.91 percent of its AUM and down from $25.459 billion in net February inflows. Active funds suffered an estimated $309.808 billion in net March outflows (down from $11.675 billion in February inflows), and even passive funds suffered an estimated $16.57 billion in net March outflows (down from $13.784 billion in February inflows).  

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