January net flows into small fund firms worsened by more than $1.2 billion year-over-year. Yet flows still improved by nearly $9.7 billion month-over-month.

This article draws from Morningstar Direct data for January 2023 open-end mutual fund and ETF flows, excluding money-market funds and funds of funds. (Other asset management products, like CITs and SMAs, are also not included.) More specifically, this article focuses on the 160 firms (up M/M from 159 in December 2022 but down Y/Y from 170 in January 2022) with between $1 billion and $10 billion each in long-term fund AUM.

Small firms had $508 billion in total long-term fund AUM across 4,311 funds as of January 31, 2023, accounting for 2.1 percent of overall industry long-term fund AUM. That compares with $488 billion and 2.15 percent on December 31, 2022, and with $539 billion and 2.02 percent on January 31, 2022.

89 of those small fund firms brought in net inflows in January 2023, up M/M from 42 in December 2022 but down Y/Y from 103 in January 2022.

Fuller & Thaler took the lead last month, thanks to an estimated $398 million in net January 2023 inflows, up M/M from $11 million in December 2022 outflows and up Y/Y from $208 million in January 2022 inflows. Other big January 2023 inflows winners included: USCF, $269 million (up M/M from $354 million in net outflows, up Y/Y from $378 million in net outflows); Muzinich, $211 million (up M/M from $64 million, up Y/Y from $8 million in net outflows); AXS, $189 million (up M/M from $12 million, up Y/Y from $31 million in net outflows); and Catalyst, $182 million (up M/M from $2 million in net outflows, up Y/Y from $59 million in net inflows).

AXS took the lead proportionately last month, thanks to estimated net January 2023 inflows equivalent to 15.2 percent of its AUM. Other big inflows winners included: Muzinich, 15 percent; Alpha Architect, 9.4 percent; USCF, 7.7 percent; and Invenomic, 5.9 percent.

On the flip side, Pacific Funds took the outflows lead last month, thanks to an estimated $275 million in net January 2023 outflows, up M/M from $69 million in December 2022 and down Y/Y from $359 million in net January 2022 inflows. Other big January 2023 outflows sufferers included: U.S. Global Investors, $190 million (up M/M from $94 million, down Y/Y from $332 million in net inflows); Pear Tree, $190 million (down M/M from $192 million, down Y/Y from $53 million in net inflows); JOHCM, $189 million (down M/M from $472 million, down Y/Y from $48 million in net inflows); and Brown Capital Management, $143 million (down M/M from $359 million, up Y/Y from $55 million).

U.S. Global Investors took the outflows lead proportionately, thanks to estimated net January 2023 outflows equivalent to 7.3 percent of its AUM. Other big outflows sufferers included: LSV, 5.6 percent; Pear Tree, 4 percent; iM Global Partner, 3.4 percent; and Pacific, 2.9 percent.

As a group, small fund firms brought in an estimated $1.656 billion in net January 2023 inflows, equivalent to 0.33 percent of their combined AUM and accounting for 3.88 percent of overall industry long-term inflows. That compares with $7.995 billion in net outflows, 1.64 percent of AUM, and 9.32 percent of industry outflows in December 2022, and with $2.877 billion in net inflows, 0.53 percent of AUM, and 32.2 percent of industry inflows in January 2022.

Across the entire industry, the 783 firms tracked by the M* team (down M/M from 788, down Y/Y from 797) brought in an estimated $42.682 billion in net January 2023 inflows, equivalent to 0.18 percent of overall long-term fund AUM of $24.165 trillion, across 42,338 funds. That's up M/M from $85.82 billion in net outflows and 0.38 percent of AUM in December 2022, and up Y/Y from $8.936 billion in net inflows and 0.03 percent of AUM in January 2022.

Passive funds brought in $47.436 billion in net long-term fund inflows in January 2023, up M/M from $35.056 billion in December 2022 and up Y/Y from $22.087 billion in January 2022. Yet active funds suffered $4.367 billion in net January 2023 outflows, down M/M from $121.317 billion and down Y/Y from $13.138 billion. 

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