Flows continue to rebound for the mutual fund industry, but not among the smallest fund firms.

James Garrett Stevens Exchange Traded Concepts CEO

This article draws from Morningstar Direct data on June 2020 open-end mutual fund and ETF flows, excluding money-market funds and funds of funds. More specifically, this article focuses on the 502 firms (down from 510 in May) with less than $1 billion each in long-term fund and ETF AUM. 228 of those firms gained net inflows in the first half of the year, 212 in the second quarter alone (down from 229 in Q1), and 216 in June (up from 212 in May).

Exchange Traded Concepts took the lead in the first half of 2020, bringing in an estimated $505 million in net inflows, more than any other micro fund firm. Other big inflows winners in the first half of 2020 included: Toroso, $480 million; Spyglass, $426 million; Axonic, $421 million; and Rational Funds, $312 million.

Absolute Investment Advisers and Little Harbor Advisors were both apparent newcomers to the business in the first half of the year, with Little Harbor being a Q2 newcomer, too. (There were no apparent newcomers in June.)

ETC also led the micro pack last quarter, thanks to an estimated $425 million in net Q2 inflows, up from $53 million in Q1. Other big Q2 inflows winners included: Axonic, $421 million (up from negligible inflows); Toroso, $205 million (down from $275 million); and TransWestern, $177 million (up from $7 million).

Microsectors took the lead last month with an estimated $114 million in net June inflows, up from $11 million in May outflows. Other big June inflows winners included: Roundhill, $96 million (up from $3 million); O'Shares, $94 million (up from $81 million); Axonic, $88 million (down from $148 million); and EMQQ, $70 million (up from $32 million).

On the flip side, the first half of the year was rough for Schroder, which suffered an estimated $706 million in net outflows, more than any other micro fund firm. Other big outflows sufferers in the first half of the year included: Chiron, $644 million; CRM, $461 million; Highland, $310 million; and 361, $260 million.

Schroder also led the outflows pack last quarter, thanks to an estimated $687 million in net Q2 outflows, up from $19 million in Q1. Other big Q2 outflows sufferers included: James Alpha, $235 million (down from $247 million in net inflows); Chiron, $234 million (down from $409 million); Dean, $126 million (down from $27 million in net inflows); and 361, $114 million (down from $146 million).

And Schroder also led the outflows pack last month, thanks to an estimated $625 million in net June outflows, up from $1 million in May. Other big June outflows sufferers included: James Alpha, $206 million (up from $20 million); AAAMCO, $100 million (down from negligible inflows); TCM, $93 million (up from $14 million); and Chiron, $83 million (up from $74 million).

As a group, the 502 fund firms with less than $1 billion each in long-term fund and ETF AUM suffered an estimated $1.455 billion net outflows in the first half of 2020. That's equivalent to 1.54 percent of their combined AUM and accounting for 1.44 percent of the industry's net outflows.

Last quarter, micro fund firms gained an estimated $909 million in net Q2 inflows, equivalent to 0.96 percent of their combined AUM and accounting for 0.75 percent of net industry inflows. That's up from $1.832 billion in net outflows, equivalent to 1.92 percent of their combined AUM and accounting for 0.8 percent of net industry outflows.

Micro fund firms suffered an estimated $179 million in net June outflows, equivalent to 0.19 percent of their combined AUM. That's down from $664 million in net May inflows, equivalent to 0.71 percent of AUM.

Across the entire industry, the 758 fund firms (down from 763 in May) tracked by the M* team suffered an estimated $100.974 billion in net outflows in the first half of 2020, equivalent to 0.51 percent of their combined AUM. Yet in Q2 the industry brought in an estimated $121.511 billion in net inflows, equivalent to 0.61 percent of industry AUM. That's up from $223.83 billion in net Q1 inflows, equivalent to 1.31 percent of net inflows.

In June alone, the industry brought in an estimated $69.822 billion in net inflows, equivalent to 0.35 percent of industry AUM (up from $33.001 billion and 0.17 percent in May). Active funds brought in an estimated $28.617 billion in net June inflows, while passive funds brought in an estimated $41.295 billion. 

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