Fund Flows Have Fourth Good Month

July was the fourth consecutive month in which long-term fund flows equaled or surpassed $50 billion, according to Strategic Insight (SI), an Asset International company and sister company to PLANADVISER.

Investors deposited $36 billion into bond funds and $14 billion into equity/hybrid funds in July, the SI data show.

Three-quarters of the flows into equity funds went to international/global equity funds. Taxable bond funds collectively garnered $28 billion of bond fund flows for the month, with flows coming into all major categories.

Evidence that investors remain cautious is found in the fact that July marked the fourth straight month of $30 billion-plus bond fund flows. Total bond fund flows year-to-date through July are nearly $200 billion, more than double the volume in the corresponding period last year, SI said.

Flows into asset allocation funds-of-funds rose to $5.4 billion in July, up from $3.7 billion in the prior month. Flows into lifecycle strategy funds-of-funds remained steady, while the net new intake of other kinds of specialized funds-of-funds programs saw an uptick in July. Year-to-date, funds-of-funds have brought in a total of $21 billion in net new cash flows.

Exchanged-traded funds (ETFs)/exchange-traded notes (ETNs) across all asset classes and legal structures garnered about $12 billion in July, with flows driven by Small-Cap Core, S&P 500 Index, Emerging Markets, Dedicated Short Bias, and Natural Resources funds. Year-to-date through July, ETFs/ETNs have collectively drawn an estimated $47 billion in net new flows, compared to about $40 billion in the first seven months of 2008.

Money-market mutual fund assets declined by about $45 billion in July as investors shifted to higher-yielding investments.

Among the largest fund firms (firms with more than $20 billion in long-term fund assets under management), those garnering the most long-term fund flows in July were Vanguard ($12.2 billion); PIMCO/Allianz Global ($8 billion); Barclays Global Investors ($4.4 billion); Fidelity ($3 billion); and JPMorgan Funds ($2.3 billion). Among smaller managers of long-term funds, those that led in long-term fund flows in July were TCW, Lazard Asset Management, Matthews Asian Funds, Manning & Napier Advisors, TIAA-CREF, and InvescoPowerShares.

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