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Morningstar Publishes 2012 Global Fund Flows Trend Report

Stocks in this article: MORN

In the news release, Morningstar Publishes 2012 Global Fund Flows Trend Report, issued 07-Mar-2013 by Morningstar, Inc. over PR Newswire, we are advised by the company that the 16 percent and 18 percent of worldwide long-term inflows captured by Vanguard and PIMCO, respectively, in 2012 includes mutual funds only, not mutual funds and ETFs as indicated in the original press release. The complete, corrected release follows:

Morningstar Publishes 2012 Global Fund Flows Trend Report

CHICAGO, March 7, 2013 /PRNewswire/ -- Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research, today published its first Global Fund Flows Trend Report. The research report examines the trends that drove 2012 mutual fund asset flows in five key markets—Australia, Canada, Europe, Japan, and the United States—and provides a worldwide overview that includes these regions as well as other markets in which Morningstar tracks fund performance and assets.

"Despite ongoing worldwide economic uncertainty, the global fund management industry grew at a 3.9 percent organic growth rate in 2012. Excluding money market funds, USD 565 billion flowed into mutual funds during the year. These massive inflows, though, fell short of 2009 and 2010, which saw inflows of USD 746 billion and USD 672 billion, respectively. Moreover, the average management fee that the industry gathers from investors has fallen dramatically since 2007 due to the cyclical shift to fixed-income products and a secular inclination toward less expensive funds," Syl Flood, product manager, investment research for Morningstar, said. "The prevailing global trend in 2012 was investors' hunger for yield and quest for the perceived safety of fixed-income funds. Worldwide, fixed-income funds gathered USD 535 billion in 2012, or nearly 95 percent of long-term net inflows."

Highlights from Morningstar's Global Fund Flows Trend Report include:

  • U.S. fixed income, which houses the intermediate-term bond category and American heavyweights PIMCO Total Return and DoubleLine Total Return, is by far the largest long-term global category, with nearly USD 2 trillion in assets under management (AUM). U.S. investors contributed USD 199 billion of the category's USD 227 billion total inflow in 2012. The PIMCO fund is by far the world's largest actively managed strategy, with USD 442 billion in assets (including assets managed for institutional clients). 
  • In 2012, interest from cross-border investors propelled funds in the U.S. fixed-income category to a 47 percent organic growth rate. Many of the most popular offerings are tended by U.S.-based managers, including AllianceBernstein, Muzinich, Neuberger Berman, and PIMCO.
  • While 78 percent of worldwide mutual fund and exchange-traded fund (ETF) AUM still resides in actively managed funds, passive products captured 41 percent of estimated net flows—USD 355 billion—in 2012. With the exception of Australia and New Zealand, index funds grew faster than actively managed funds in every geographic region during the year, and the United States is leading the way in its appetite for low-cost, passive strategies.
  • Newer funds—those without a three-year track record—captured 87 percent of worldwide inflows in 2012.
  • Vanguard and PIMCO took in 16 percent and 18 percent, respectively, of worldwide long-term mutual fund inflows in 2012.

The report examines each key market in detail, analyzing flows by attributes such as broad asset class, Morningstar category, and fund group, as well as new fund launches and the active versus passive dynamic in each market. The commentary encompasses the 71 domiciles in which Morningstar tracks fund flows, accounting for USD 20.7 trillion in assets, and touches on the USD 1.9 trillion ETF universe tracked by Morningstar, when applicable.

To view the complete report, please visit http://www.global.morningstar.com/flowstrend2012. For more information about Morningstar Asset Flows, please visit http://global.morningstar.com/assetflows.

The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

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