Long-Term Funds Struggled in September

Long-term mutual funds experienced net outflows of $900 million in September, according to Strategic Insight (SI), an Asset International Company.

SI’s monthly report on mutual fund asset flows shows net intake for equity products totaled $18.8 billion in September. International equity funds showed strong and persistent demand during the month, attracting $13 billion. U.S. Equity funds attracted $5.8 billion in September on continued demand for natural resources (up $2.1 billion) and income-mixed funds ($1 billion), according to SI.

Outflows from long-term fund types were primarily the result of a $23.1 billion aggregate net outflow from taxable bond funds during the month. The fund categories of objective corporate intermediate maturity (-$21.4 billion) and corporate high yield (-$6.7 billion) drove outflows from the asset class. Tax-free bond funds experienced net inflows, however, totaling $3.4 billion.

Overall, equity funds experienced negative one-month returns in September, as growth concerns in the ex-U.S. markets produced a -4.1% average return for international equity funds during the month. U.S. equity funds also ended September lower, SI says, recording a -2.4% average one-month return. Taxable bond funds were also negative, at -1.0% during the month, while tax-free bond funds ended the month slightly higher with an average 0.2% return.

Money market fund net deposits totaled $24.1 billion in September.

Information on how to obtain research reports from Strategic Insight is available at www.sionline.com.