Bond Funds Dominate Mutual Fund Inflows through June

Flows into U.S. mutual funds reached $13.5 billion in June, according to data from Morningstar.  

Mutual funds saw inflows in five of the last six months, gathering $166.7 billion in the first half of 2010 – about 24% higher than total inflows for the same period in 2009.   

Investors added $17.6 billion to taxable-bond funds in June, bringing the total inflows to $119.6 billion during the first two quarters of 2010. Municipal-bond funds took in nearly $2 billion in June and $19.5 billion for the year-to-date period.   

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Despite the year-to-date losses sustained by the MSCI EAFE Index and continuing worry about the downturn in foreign stocks, year-to-date inflows for international-equity funds reached $19.6 billion, while domestic-stock funds experienced outflows of nearly $17 billion, Morningstar said.  

Alternative mutual funds, many of which were launched since the credit crisis, have recorded record inflows. PIMCO Fundamental Advantage Total Return has the led the way, taking in nearly $3.3 billion over the past 12 months through June.   

Money market funds have lost $790.5 billion in assets over the past 12 months, with almost 80% of those outflows coming from institutional share classes.   

To view the complete report, please visit http://www.global.morningstar.com/juneflows10. 

ETFs See $34B Inflow through June

June marked the fifth consecutive month of inflows for U.S. exchange-traded funds (ETFs), Morningstar reported.  

Investors poured more than $9.9 billion into ETFs during the month, bringing the year-to-date total to $34 billion.   

In June, as well as for the year-to-date period and the trailing one-year period, taxable-bond ETFs led all ETF asset classes with more than $4.7 billion in net inflows. Inflows of roughly $2.6 billion into SPDR S&P 500 SPY bolstered overall flows for domestic-stock ETFs, which reached $2.7 billion in the month. While large- and mid-cap U.S. stock ETFs had net inflows in June, small-cap ETFs saw large outflows. 

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While flows into iShares MSCI Germany Index EWG and iShares FTSE/Xinhua China 25 likely represent investors repositioning their international-stock exposure to include Germany and China amid the sovereign debt crisis in Europe, most single-country ETFs experienced outflows in June, Morningstar said.   

SPDR Gold Shares GLD was the second-most popular ETF in June, with inflows of $2.1 billion. Gold ETFs experienced strong inflows during the month, while funds that provide exposure to energy markets by rolling one-month futures contracts led outflows for commodities ETFs.   

To view the complete report, please visit http://www.global.morningstar.com/juneflows10. 

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