MutualFundWire.com: As Micro Firms' Inflows Climb 60 Percent, a Contrarian Boutique Leads

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Friday, November 19, 2021

As Micro Firms' Inflows Climb 60 Percent, a Contrarian Boutique Leads

A contrarian boutique took the lead last month as the smallest fund firms' inflows rose 60 percent.

Murray Stahl
Horizon Kinetics Asset Management LLC
Chairman, CEO, Chief Investment Officer, Co-Founder

This article draws from Morningstar Direct data on October 2021 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 499 firms (up from 498 in September 2021 and 490 in October 2020) with less than $1 billion each in long-term fund AUM.

Micro fund firms had $97 billion in total long-term fund AUM as of October 31, 2021, accounting for 0.35 percent of overall industry long-term fund AUM. That compares with $95 billion and 0.36 percent on September 30, 2021, and with $91 billion and 0.44 percent on October 31, 2020.

254 of those micro fund firms brought in net inflows last month, down from 262 in September 2021 but up from 197 in October 2020.

Horizon Kinetics took the lead last month among micro fund firms, thanks to an estimated $146 million in net October 2021 inflows, up month-over-month from $38 million in September 2021. Other big October 2021 inflows winners included: Canyon Partners' River Canyon, $122 million (up M/M from $40 million, up year-over-year from $5 million in October 2020); Highland, $112 million (up M/M from $46 million, up Y/Y from $15 million in net outflows); AGRA, $61 million (negligible change M/M); and Little Harbor Advisors, $60 million (up M/M from $37 million, up Y/Y from $17 million).

Last month included three apparent newcomers: Abraham Trading Co, Reflection Asset Management, and Valkyrie ETF Trust II.

Horizon Kinetics kept the 2021 lead as of October 31, thanks to an estimated $825 million in net year-to-date inflows. Other big YTD inflows winners included: River Canyon, $753 million; and Sprucegrove, $433 million.

The same three micro firms also led the pack for the 12-month period ending October 31, 2021: Horizon Kinetics with $825 million, River Canyon with $797 million, and Sprucegrove with $433 million.

On the flip side, last month was a rough one for Aware, which led the micro fund firm outflows pack thanks to an estimated $113 million in net October 2021 outflows, down M/M from $1 million in net September 2021 inflows but up Y/Y from $50 million in October 2020 outflows. Other big October 2021 outflows sufferers included: Schroder, $37 million (down M/M from $49 million, down Y/Y from negligible inflows); Renaissance Capital, $24 million (down M/M from $3 million in net inflows, down Y/Y from $84 million in net inflows); Payson Funds, $17 million (down M/M from $1 million in net inflows, down Y/Y from negligible inflows); and FormulaFolios, $16 million (up M/M from negligible outflows, down Y/Y from $33 million).

Sunbridge Capital Partners kept the 2021 micro outflows lead as of October 31, thanks to an estimated $1.678 billion in net YTD outflows. Other big outflows sufferers included: Schroder, $484 million; and Muzinich, $411 million.

The same three firms also led the micro outflows pack for the 12-month period ending October 31, 2021: Sunbridge with $1.655 billion, Schroder with $465 million, and Muzinich with $409 million.

As a group, micro fund firms brought in an estimated $1.296 billion in net October 2021 inflows, equivalent to about 1.33 percent of their combined AUM and accounting for 1.55 percent of overall industry long-term inflows. That compares with $810 million, 0.85 percent of AUM, and 1.42 percent of industry inflows in September 2021, and with $45 million in net outflows and 0.05 percent of AUM in October 2020.

YTD as of October 31, 2021, micro firms brought in $7.762 billion in net inflows, equivalent to 7.98 percent of their combined AUM and accounting for 0.74 percent of overall industry long-term inflows. And for the 12-month period ending October 31, 2021, micro firms brought in $8.021 billion in net inflows, equivalent to 8.24 percent of their AUM and accounting for 0.64 percent of industry inflows.

Across the entire industry, the 781 firms (up from 777 in September 2021 and 756 in October 2020) tracked by the M* team brought in a combined $83.864 billion in net long-term inflows in October 2021, equivalent to 0.3 percent of industry long-term AUM of $27.795 trillion. That's up from $57.068 billion in inflows and $26.634 trillion in September 2021 and $13.432 billion in inflows and $20.853 trillion in AUM in October 2020.

Active funds brought in an estimated $5.324 billion in October 2021 inflows, down M/M from $9.916 billion but up Y/Y from $6.934 billion in net outflows. Passive funds brought in $78.71 billion in October inflows, up M/M from $47.828 billion and up Y/UY from $20.374 billion.

In the first ten months of 2021, long-term funds brought in $1.041921 trillion in net inflows, equivalent to 3.75 percent of their combined AUM. And in the 12 months ending October 31, 2021, long-term funds brought in $1.255539 trillion in net inflows, equivalent to 4.52 percent of their AUM.

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