Inflows into global open-ended mutual funds almost doubled last year to around 1,600 billion dollars. The vast majority of the inflow was invested in bond funds, according to Morningstar data.
The strong inflows have taken the total stock invested in mutual funds to almost 42,000 billion dollars in total. In 2019, a net 1008 billion dollars flowed into bond funds, beating the previous record of 869 billion dollars achieved in 2017, according to Morningstar.
Net flows to equity funds amounted to only USD 9 billion, compared to USD 354 billion in 2018. This is striking, since equity markets enjoyed a stellar 2019, while 2018 was characterised by negative returns.
Morningstar believes the lack of demand for equities is due to the influence of managed portfolios. ‹Managers of such portfolios probably reduced their exposure to equities throughout the year, while prices rose. This is particularly noticeable in the US, where investors made redemptions totalling $82 billion from equity funds.›
Furthermore, inflows to money market funds rose to 591 billion dollars, more than double last year’s amount. Overall, US bonds were the most popular asset class, welcoming net inflows of 521 billion dollars.