Net flows out of the active side side of the mutual fund industry fell by more than 40 percent last month, even as passive inflows quadrupled, according to the latest data from the folks at a publicly traded investment reseach company.

This article draws from Morningstar Direct data on May 2024 open-end mutual fund and ETF flows, excluding money market funds and funds of funds. The data also excludes other asset management products, like CITs and SMAs.***

Vanguard led the passive side for a fifth month in a row, thanks to an estimated $20.482 billion in May 2024 passive inflows, up by $3.674 billion month-over-month from April 2024 and up by $22.446 billion year-over-year from May 2023. Other big May 2024 passive inflows winners included: BlackRock (including iShares), $20.363 billion (up by $19.719 billion M/M, up by $20.894 billion Y/Y); State Street's SSGA, $12.653 billion (up by $23.506 billion M/M, down by $3.584 billion Y/Y); Fidelity, $9.319 billion (up by $7.407 billion M/M, up by $4.109 billion Y/Y); and Invesco, $8.365 billion (up by $4.05 billion M/M, up by $7.764 billion Y/Y).

J.P. Morgan (including Six Circles) took the lead on the active side, thanks to an estimated $4.392 billion in net May 2024 active inflows, up by $2.133 billion M/M from April 2024 but down by $1.116 billion Y/Y from May 2023. Other big May 2024 active inflows winners included: Fidelity, $2.147 billion (down by $3.944 billion M/M, up by $7.501 billion Y/Y); Allianz's Pimco, $1.313 billion (down by $1.144 billion M/M, up by $276 million Y/Y); Prudential's PGIM, $1.242 billion (up by $510 million M/M, up by $1.237 billion Y/Y); and Janus Henderson, $1.102 billion (up by $559 million M/M, up by $890 million Y/Y).

On the flip side, Raffery's Direxion took the outflows lead last month among passive fund firms, suffereing an estimated $2.592 billion in net May 2024 passive outflows, a $3.826-billion net flows drop M/M from April 2024 and a $2.708-billion net flows drop Y/Y. Other big passive outflows sufferers included: J.P. Morgan, $1.726 billion (down by $2.392 billion M/M, a $1.917-billion net flows drop Y/Y); MassMutual, $622 million (a $653-million net flows drop M/M, up by $604 million Y/Y); Grayscale, $600 million (down by $1.792 billion M/M, up by $600 million Y/Y); and Jackson, $524 million (up by $471 million M/M, up $368 million Y/Y).

Vanguard took the active outflows lead last month, thanks to an estimated $5.525 billion in net active May 2024 outflows, up by $881 million M/M from April 2024 but down by $3.049 billion Y/Y; Capital Group (home of American Funds), $4.595 billion (down by $2.762 billion M/M, down by $824 million Y/Y); Franklin Templeton (including Putnam and Royce), $2.601 billion (down by $688 million M/M, down by $229 million Y/Y); Sun Life's MFS, $1.98 billion (up by $250 million M/M, up by $811 million Y/Y); and T. Rowe Price, $1.939 billion (down by $4.61 billion M/M, down by $3.194 billion Y/Y).

The 151 passive funds (down by two M/M, up by four Y/Y) tracked by the M* team brought in an estimated $73.791 billion in May 2024, up by $57.084 billion M/M, and up by $52.745 billion Y/Y. 51 percent (77) of those firms brought in net passive inflows last month, compared with 47.1 percent in April 2024 and with 40.1 percent in May 2023.

The 746 active fund firms (up by three M/M, up by 29 Y/Y) tracked by the M* team suffered $15.441 billion in net May 2024 active outflows, down by $10.366 billion M/M and down by $28.575 billion Y/Y. 44.2 percent (330) of those firms brought in net active inflows last month, down M/M from 44.7 percent but up Y/Y from 32.9 percent.

***This caveat is particularly important for jumbo fund firms, many of which are big players in the 401(k) business, where collecitve investment trusts (CITs) and separately managed accounts (SMAs) are commonly used alternatives to traditional mutual funds. 

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