Morningstar: Mutual fund assets surge in 3Q, but American Funds still saw outflows

While the third quarter proved to be a big comeback month for inflows into open-ended mutual funds overall, one mutual fund behemoth continued to bleed assets, according to a report today from Morningstar Inc.

While the third quarter proved to be a big comeback month for inflows into open-ended mutual funds overall, one mutual fund behemoth continued to bleed assets, according to a report today from Morningstar Inc.

During the quarter, investors yanked $5.1 billion more out of funds run by American Funds than they put in, according to Morningstar. American Funds’ experienced net outflows of $1.8 billion in September alone, said Morningstar.

The steady stream of outflows continue a trend that has plagued the firm all year. Year-to-date through September, the firm has experienced outflows of $19.3 billion, while the other major firms had inflows.

American Funds’ business mix has worked against it this year, according to Morningstar. Its key rivals, The Vanguard Group Inc. and Fidelity Investments, have a more diversified menu of funds, while American Funds’ mutual fund lineup is significantly skewed toward equities, the report said.

“We don’t discus fund flows,” said Maura Griffin, a spokeswoman for American Funds.

Overall, investors poured $144.7 billion more into mutual funds than they pulled out during the third quarter, said Morningstar. The majority of those inflows, $123.73 billion, went into bond funds.

U.S. stock funds actually experienced outflows of $3.1 billion in September, but much of that can be attributed to investors yanking money from American Funds, advised by Capital Research and Management Co., according to Morningstar.

Among the least popular U.S. equity funds for the month were the group’s Washington Mutual (AWSHX), Growth Fund of America (AGTHX), and Investment Company of America (AIVSX) funds which saw outflows of $620 million, $334 million, and $417 million, respectively.

More broadly, estimated net inflows into U.S. stock funds during the quarter were $741 million, and inflows into international stock funds were $17 billion. Morningstar also reported that $188.2 billion exited U.S. money market funds.