February Mutual Fund Flows Kept Pace with January

Flows into long-term mutual funds hit $27.9 billion in February, nearly matching January’s total of $29.8 billion, according to the Morningstar Direct Fund Flows Update.

Taxable bond and U.S. stock remained the two most popular asset classes, taking in $11.9 billion and $10.1 billion, respectively. A Morningstar announcement said the combined inflows of $25.9 billion seen by U.S. stock funds in January and February is the most investors have added to the asset class during those same two months since they contributed $44.8 billion in 2004.   

In a break from 2010 trends among both U.S. stock and international-stock funds, large-cap categories saw greater inflows than their small-cap counterparts.    

Municipal-bond funds were the only asset class to see outflows, but the pace of redemptions slowed to $4.4 billion following outflows of $12.5 billion in January.   

Credit-oriented taxable-bond categories remained popular. After collecting $5.6 billion in January, bank-loan funds added another $4.8 billion in February. The combined inflows of $10.4 billion during the first two months of 2011 is greater than the inflows recorded for the category during the same period in any prior year, according to the announcement.   

After outflows of more than $75.9 billion in January, money market funds reversed course with inflows of $16.7 billion during the month.