Morningstar - Q2 2021 - 79

FUND FLOWS SPOTLIGHT

Investors Reposition for Growth and Inflation
Financial stock funds were in the lead for
the year to date after their fourth-straight month
of inflows. In February, energy funds had their
strongest showing since December 2014,
and natural resources funds, which tend to focus
on materials stocks (such as mining and
chemicals companies), had their highest monthly
inflow in the past decade.

In the first two months of 2021, categories that
might weather an inflationary environment
better than most had the highest organic growth
rates. Prospects of a new federal stimulus
package along with lower coronavirus case counts
likely spurred optimism about future
economic activity, while sparking concerns
about higher inflation.

Inflation-protected bond funds collected nearly
$7 billion in February, a category record. Bank-loan
funds, which invest in securities with floating
interest rates, marked the third month in a row of
inflows after a 25-month stretch of outflows.
Adam Sabban, CFA, and Supreet Grewal are manager
research analysts with Morningstar Research Services LLC.

YTD Organic Growth Rate

YTD Estimated Net Flow

25%

$15,000M
13,158

20.6

20

12,000

11,170

15

15.1

14.3

12.9

12.3

9,000

8,415

10

6,000
4,580

4,454

4,508

6.7

5

6.5

0
Financial

Commodities
Broad Basket

Equity
Energy

Natural
Resources

Bank Loan

6.2

2,861

2,408

3,000

0

Industrials

Consumer
Cyclical

InflationProtected Bond

Source: Morningstar Direct. Data from 01/01/2021 to 02/28/2021.

Active Versus Passive Fund Strategies The percentage of U.S. actively managed funds that outperformed their respective Morningstar Style Index.

 < 20%

 > 40%

Index Returns (03/31/2021)

49.0%

74.9

54.1%

68.3

50.3%

73.3

39.5%

103.3

68.4%

82.2

75.2%

81.9

Value

Core

Growth

55.7%

10.2

25.7%

16.4

30.4%

21.8

74.3%

8.6

29.4%

13.4

29.5%

22.4

58.9%

9.0

48.8%

12.0

56.4%

18.5

Value

Core

Growth

55.4%

11.4

19.7%

16.2

29.5%

20.8

56.4%

11.1

32.9%

13.8

29.5%

20.6

Mid

55.8

68.6%

10.3

54.7%

13.0

57.2%

19.4

Small

73.4%

Large

57.1

Mid

50.3%

Small

46.1

Large

79.9%

5-Year

Mid

3-Year

Small

1-Year

 20 to 40%

Value

Core

morningstar.com/lp/magazine

Large

Percentage of Actively Managed Funds Outperforming Index:

Growth

79


http://www.morningstar.com/lp/magazine

Morningstar - Q2 2021

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Contents
Morningstar - Q2 2021 - Cover1
Morningstar - Q2 2021 - Cover2
Morningstar - Q2 2021 - 1
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Morningstar - Q2 2021 - Contents
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