MutualFundWire.com: Mid-Size Firms Suffer 72 Percent of MF Outflows

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Wednesday, September 18, 2019

Mid-Size Firms Suffer 72 Percent of MF Outflows

Mid-size fund firms' outflows dominated last month as mutual fund flows for the industry swung negative.

Daniel Simkowitz
Morgan Stanley
Head of Investment Management

This article draws from Morningstar Direct data on August 2019 open-end mutual fund and ETF flows, excluding money-market funds and funds of funds. More specifically, this article focuses on the 75 firms with between $10 billion and $100 billion each in fund AUM. 27 of those firms gained net inflows in August, down from 30 in July.

Morgan Stanley kept the lead last month among mid-size fund firms, with estimated net August inflows of $827 million, yet those inflows still fell 39.9 percent from $1.451 billion in July. Other big August winners included: AllianceBernstein, $523 million (down from $557 million); Baird, $498 million (down from $1.439 billion); Edward Jones' Bridge Builder, $420 million (down from $598 million); and Rafferty's Direxion, $362 million (up from $566 million in net outflows).

Proportionately, Direxion took the mid-size pack lead, with estimated net August inflows equivalent to 2.69 percent of its AUM, up from 4.28 percent in net outflows in July. Other big August winners included: Brown Advisory, 1.98 percent (up from 1.87 percent); UBS, 1.9 percent (up from 2.7 percent in net outflows); Akre, 1.68 percent (up from 1.02 percent); and Morgan Stanley, 1.67 percent (down from 2.79 percent).

On the flip side, August was another rough month for Harris' Oakmark, which suffered an estimated $1.478 billion in net outflows, again more than any other mid-size fund firm and up from $1.206 billion in July. Other big August sufferers included: WisdomTree, $1.142 billion (up from $117 million); DWS, $1.116 billion (up from $170 million); AQR, $920 million (up from $491 million); and Waddell & Reed's Ivy, $911 million (up from $835 million).

Proportionately, AQR led the mid-size outflows pack last month, suffering estimated net August outflows equivalent to 3.98 percent of its AUM, up from 2.05 percent in July. Other big August sufferers included: WisdomTree, 3.13 percent (up from 0.3 percent); AIG, 2.96 percent (up from 2.57 percent); Matthews Asia, 2.62 percent (up from 2.3 percent); and Glenmede, 2.4 percent (up from 1.47 percent).

As a group, the 75 mid-size fund firms suffered an estimated $11.522 billion in combined net August outflows, equivalent to about 0.43 percent of their combined AUM. That's up from $2.342 billion in net July outflows. Put another way, in August mid-size fund firms accounted for 72.34 percent of net industry outflows.

Across the whole industry (M* tracks flows from 767 firms, down from 771 in July), long-term mutual funds and ETFs suffered a combined $15.927 billion in net outflows in August, equivalent to about 0.08 percent of industry AUM. That's down from $26.698 billion in net July inflows. Passive funds suffered $4.7 billion in net August outflows, while active funds suffered $11.227 billion in net outflows.

Editor's Note: Calculations for this story overlooked one of the 75 mid-size fund firms tracked in Morningstar Direct's data. After adding that firm's numbers into the calculations, the overall figures above have been updated accordingly.

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