An RIA's MF Startup Keeps the Lead
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Thursday, August 15, 2019

An RIA's MF Startup Keeps the Lead

A mutual fund startup and sibling to an RIA kept the lead last month among the smallest fund firms.

Drew Kent Horter
Tactical Fund Advisors / Horter Investment Management
CEO, Chief Compliance Officer / CEO, President, Fonder
This article draws from Morningstar Direct data on July 2019 open-end mutual fund and ETF flows, excluding money-market funds and funds of funds. More specifically, this article focuses on the 508 firms (six fewer than in June) with less than $1 billion in fund AUM each. 223 of those firms gained net inflows last month.

Newcomer Tactical Fund Advisors (sibling to Horter Investment Management) repeated its victory, bringing in an estimated $75 million in net July inflows, down from $111 million in June (its launch month). Other big July winners included: Aptus Capital Advisors, $67 million (up from $5 million in net outflows); Stone Ridge, $44 million (up from $18 million in net outflows); Aristotle, $43 million (up from $15 million); and Infinity Q, $42 million (up from $31 million).

Proportionately setting aside brand new fund families, AFAM's Innealta led the micro fund firm pack with estimated net July inflows equivalent to 44.42 percent of its AUM, down from 49.6 percent in June. Other big July winners included: Tactical, 40.25 percent; Roundhill, 38.79 percent (down from 48.99 percent); Heitman, 35.52 percent (down from 1.19 percent in net outflows); and Green Square Asset Management, 26.02 percent (up from 6.27 percent).

July's apparent newcomers included: Kennedy Capital Management, OBP Capital, RimRock Capital Management, and Wahed Invest.

On the flip side, July was a rough month for Vivaldi, which suffered an estimated $96 million in net outflows, more than any other sub-$1-billion-AUM fund firm and down from $27 million in net June inflows. Other big July sufferers included: BNP Paribas, $68 million (up from negligible outflows); Equinox, $44 million (up from $9 million); Power Mutual Funds, $40 million (down from $68 million); and Gerstein Fisher, $39 million (up from $36 million).

Proportionately, BNP Paribas suffered the most last month, with estimated net July outflows equivalent to 6,656.16 percent of its AUM (i.e. its outflows were 66 times the size of the AUM it had left over afterwards), up from 0.01 percent in June. Other big July sufferers included: PSG Funds, 4,678.93 percent (up from 0.83 percent); Harvest, 105.9 percent (up from 0.48 percent); Chou America, 103.59 percent (up from 53.28 percent); and NorthPointe, 84.08 percent (up from 10.71 percent).

As a group, the 508 fund firms with less than $1 billion each in fund AUM suffered about $84 million in net July outflows, equivalent to about 0.09 percent of their combined AUM. That's down from $198 million last month.

Across the whole industry (M* tracks flows from 771 firms), long-term mutual funds and ETFs brought in a combined $26.698 billion in estimated net inflows in July, equivalent to about 0.14 percent of industry AUM. That's down from $46.25 billion in net June inflows. Passive funds brought in $26.540 billion in net July inflows, while active funds brought in $158 million in net inflows.

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