Morningstar estimates that long-term mutual funds and ETFs attracted $32.6 billion of new investor cash in August, according to its monthly asset flow report.
Strong flows into international equity mutual funds and growing demand for fixed income were largely responsible for the overall increase in flows.
U.S. equity mutual funds and ETFs had outflows of $4.1 billion for the month.
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Actively traded U.S. equity funds experienced their sixth consecutive month of outflows.
Mutual funds now account for 8.6 percent of household wealth. While still less than pensions, real estate and bank deposits as share of overall household wealth, mutual fund assets are the fastest growing category.
Assets in long-term mutual funds and ETFs now total $13.9 trillion. Most of those assets are in actively managed funds. But passive funds are growing faster, with an 11 percent organic increase in assets last year, compared to 2 percent growth for actively managed funds.
Morningstar says that much of the growth in passively managed funds is explained by their growing favorability with retirement accounts.
The report notes that the much-anticipated "great rotation" of assets from fixed-income into equities that began to play out in June of 2013 didn't last long.
Year to date, taxable bond funds have attracted $99 billion of new assets as interest rates have fallen, while U.S. equity funds have only seen inflows of $3.5 billion. Bond flows have exceeded U.S. equity flows every month of 2014.
See also: Funds flow from U.S. equities
International equity funds have attracted $119 billion.
Vanguard continues to dominate the passive fund market, with three of the top five performing passive funds for August and the year.
J.P Morgan, Goldman Sachs and Oakmark have been the top active fund providers during the past year.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
