Two niche fund firms, both known for their leveraged-index and inverse index ETFs, took the lead last month as midsize firms gobbled more than two-fifths of the industry's shrinking inflows.

Michael Lynn Sapir ProShare Advisors, ProFund Advisors CEO

This article draws from Morningstar Direct data on January 2022 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 focused on the 76 firms (down from 79 in December 2021 but up from 75 in January 2021) with between $10 billion and $100 billion each in long-term fund AUM.

Midsize firms had $2.716 trillion in combined long-term fund AUM as of January 31, 2022, and they accounted for 10.17 percent of overall industry long-term fund AUM. That compares with $2.921 trillion and 10.4 percent on December 31, 2021, and with $2.803 trillion and 11.81 percent on January 31, 2021.

35 midsize firms brought in net long-term inflows in January 2022, down from 44 in December 2021 and from 42 in January 2021.

ProShares and ProFunds took the lead last month among midsize fund firms, thanks to an estimated $2.797 billion in January 2022 inflows, up month-over-month from $901 million in December 2021 and up year-over-year from $284 million in January 2021. Other big January 2022 inflows winners included: Rafferty's Direxion, $2.395 billion (up M/M from $788 million, up Y/Y from $78 million in net outflows); Calamos, $931 million (up M/M from $528 million, up Y/Y from $499 million); KraneShares, $820 million (up M/M from $1.026 billion in net outflows, up Y/Y from $675 million); and Neuberger Berman, $713 million (up M/M from $308 million, up Y/y from $399 million).

Direxion won proportionately last month, thanks to estimated net January 2022 inflows equivalent to 8.5 percent of its AUM. Other big inflows winners included: Pacer, 6.3 percent; KraneShares, 6.2 percent; ProShares, 4.1 percent; and GQG, 3.8 percent.

On the flip side, last month was a rough one for Virtus, which led the midsize pack with an estimated $1.32 billion in net January 2022 outflows, up M/M from $533 million in December 2021 and down Y/Y from $312 million in net January 2021 inflows. Other big January 2022 outflows sufferers included: DoubleLine, $1.177 billion (down M/M from $1.489 billion, down Y/Y from $368 million in net inflows); Alger, $1.052 billion (up M/M from $236 million, down Y/Y from $111 million in net inflows); Putnam, $830 million (down M/M from $858 million, up Y/Y from $368 million); and Harbor, $798 million (up M/M from $533 million, down Y/Y from $927 million).

Alger led the midsize outflows pack proportionately last month, suffering estimated net January 2022 outflows equivalent to 4.2 percent of its AUM. Other big outflows sufferers included: Ark, 2.7 percent; AQR, 2 percent; MassMutual, 2 percent; and Virtus, 1.8 percent.

As a group, midsize fund firms brought in an estimated $3.687 billion in net inflows in January 2022, equivalent to 0.14 percent of their combined AUM and accounting for 41.26 percent of overall industry long-term fund inflows. That compares with $6.909 billion in December 2021 outflows, equivalent to 0.24 percent of AUM, and with $18.581 billion in January 2021 inflows, equivalent to 0.66 percent of AUM and accounting for 19.47 percent of industry inflows.

Across the entire industry, the 797 firms tracked by the M* team (down M/M from 799 but up Y/Y from 753) brought in an estimated $8.936 billion in net January 2022 inflows, equivalent to 0.03 percent of overall long-term fund AUM of $26.709 trillion on January 31, 2022. That's down M/M from $87.633 billions in December 2021 inflows, equivalent to 0.31 percent of $28.084 trillion in AUM and down Y/Y from $95.454 billion in January 2021 inflows, equivalent to 0.4 percent of $23.732 trillion in AUM.

Passive funds brought in $22.087 billion in net long-term fund inflows in January 2022, down M/M from $95.932 billion and down Y/Y from $54.591 billion. Active funds suffered $13.138 billion in net long-term fund outflows in January 2022, up M/M from $8.299 billion but down Y/Y from $40.836 billion in net inflows. 

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