Bill Gross' departure from PIMCO spurred the largest outflows from taxable bond funds since June 2013, as investors poured $9 billion into long-term mutual funds and ETFs this past September, according to Morningstar's monthly asset flow report.
While actively managed fixed-income appeared to have taken a massive hit with $18.7 billion in outflows, the reality is that three Pimco funds formerly managed by Gross lost more than $23.3 billion.
Separate the Pimco redemptions and the fund class performed as it has for most of the year, with steady levels of inflows.
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At the end of September, Morningstar announced it had downgraded Pimco's flagship Total Return Fund from a gold rating to a bronze, citing what would end up being $23.5 billion in outflows as the reason.
Three other Pimco funds have since been downgraded, while its Municipal Bond Fund was upgraded.
Passively managed U.S. equity funds saw more than $15 billion of inflows, their eighth consecutive month of gains. Among all asset classes, passively managed funds attracted nearly $27 billion in September.
Active U.S. equity funds lost $12.6 billion in September, the seventh consecutive month of losses. For the year, U.S. actively managed equity has lost $63 billion.
"The one-year flows indicate that investors clearly prefer passive management in U.S. equity, sector equity and taxable bond," stated the report.
Vanguard saw more inflows than any other fund company in both its actively and passively managed funds.
"Vanguard is thriving among investors' ongoing preference for passive (and less expensive) fund management," concluded Morningstar.
Janus funds, where Bill Gross now hangs his hat, have seen consistent outflows since 2010. Whether his presence can reverse that trend remains to be seen.
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