MutualFundWire.com: Schwab Dominates As Large Firm Outflows Shrink By 89 Percent

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Thursday, July 20, 2023

Schwab Dominates As Large Firm Outflows Shrink By 89 Percent

A publicly traded brokerage's mutual fund arm dominated inflows in the first half of 2023 when it comes to large fund firms, even as the group's monthly outflows fell about 89 percent year-over-year.

Omar Aguilar
Schwab Asset Management
CEO, Chief Investment Officer

This article draws from Morningstar Direct data on June 2023 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 23 firms (up Y/Y from 22 in June 2022) with between $100 billion and $500 billion each in long-term fund AUM.

Large fund firms had a combined $4.798 trillion in total long-term fund AUM across 14,938 funds as of June 30, 2023, and they accounted for 19.21 percent of overall industry long-term fund AUM. That compares with $4.621 trillion, 14,459 funds, and 19.33 percent of industry AUM on May 31, 2023, and with $4.431 trillion and 19.43 percent of industry AUM on June 30, 2022.

Ten large fund firms brought in net inflows last month. That's up month-over-month from seven in May 2023 and up Y/Y from four in June 2022.

Schwab led the way in the first half of 2023, bringing in $15.036 billion in net inflows year-to-date as of June 30. Other big YTD inflows winners included: Edward Jones' Bridge Builder, DFA, $5.508 billion; American Century (including Avantis); and Allianz's Pimco, $2.244 billion.

Schwab also led the way last quarter, thanks to an estimated $4.508 billion in net inflows in the second quarter of 2023. Other big Q2 2023 inflows winners included: Bridge Builder, $3.349 billion; and DFA, $1.423 billion.

And Schwab also regained the lead last month, thanks to an estimated $2.637 billion in net June 2023 inflows, up M/M from $1.115 billion and up Y/Y from $1.4 billion. Other big June 2023 inflows winners included: Bridge Builder, $510 million (down M/M from $2.142 billion, up Y/Y from $243 million); and First Trust, $357 million (up M/M from $700 million in net outflows, up Y/Y from $597 million in net outflows).

On the flip side, Franklin Templeton led the outflows pack in the first half of 2023, suffering an estimated $11.187 billion in net YTD outflows as of June 30. Other big outflows sufferers included: Lord Abbett, $7.031 billion; Ameriprise's Columbia Threadneedle, $5.353 billion; Jackson, $5.204 billion; and Morgan Stanley, $3.633 billion.

Franklin Templeton also led the outflows pack last quarter, thanks to an estimated $6.319 billion in net Q2 2023 outflows. Other big outflows sufferers included: Lord Abbett, $4.212 billion; and Columbia Threadneedle, $3.048 billion.

And Franklin Templeton also led the outflows pack last month for a fifth month in a row, thanks to an estimated $1.582 billion in net June 2023 outflows, down M/M from $2.688 billion in May 2023 and down Y/Y from $5.347 billion in June 2022. Other big June 2023 outflows sufferers included: Lord Abbett, $1.243 billion (down M/M from $1.535 billion, down Y/Y from $3.135 billion); and Columbia Threadneedle, $824 million (down M/M from $1.123 billion, down Y/Y from $1.72 billion).

As a group, large fund firms suffered $13.288 billion in net outflows over the first six months of 2023. That's equivalent to 0.28 percent of their combined AUM.

In Q2 2023, large fund firms suffered an estimated $16.851 billion in net outflows. That's equivalent to 0.35 percent of their combined AUM.

In June 2023 alone, large fund firms suffered $3.302 billion in net outflows, equivalent to 0.07 percent of their combined AUM. That compares with $7.623 billion and 0.16 percent of AUM in May 2023, and with $29.598 billion and 0.67 percent in June 2022.

Across the entire industry, the 780 firms tracked by the M* team down Y/Y from 790) brought in $38.045 billion in the first half of 2023. That's equivalent to 0.15 percent of their combined AUM.

In Q2 2023, the overall industry brought in $22.483 billion in net inflows. That's equivalent to 0.09 percent of its combined AUM.

In June 2023 alone, the overall industry brought in $36.029 billion in net inflows, equivalent to 0.14 percent of its combined $24.973 trillion in AUM across 42,054 funds. That's up M/M from $22.969 billion in net outflows, 0.1 percent, $23.9 trillion in AUM, and 41,597 funds in May 2023, and up Y/Y from $61.306 billion in net outflows, 0.27 percent, $22.808 trillion in AUM, and 42,029 funds in June 2022.

Active funds suffered an estimated $31.238 billion in net outflows in June 2023, down M/M from $44.016 billion in May 2023 and down Y/Y from $90.45 billion in June 2022. On the flip side, passive funds brought in $67.267 billion in net June 2023 inflows, up M/M from $21.046 billion and up Y/Y from $29.219 billion.

Editor's Note: A prior version of this story gave the wrong number of long-term funds offered by large fund firms (those with between $100 billion and $500 billion in long-term fund AUM each). To clarify, those firms offered a total of 14,938 funds as of June 30, 2023.

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