Morningstar Publishes 2013 Global Flows Report

CHICAGO, March 6, 2014 /PRNewswire/ -- Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research, today published its second annual Global Flows Report. The research report examines 2013 mutual fund and exchange-traded fund asset flows in five key markets—Australia, Canada, Europe, Japan, and the United States—and provides a worldwide overview of these and other markets in which Morningstar tracks fund performance and assets.

"Resurgent investor confidence drove the global fund management industry to new heights in 2013. Asset inflows and strong developed-market equity returns helped long-term fund assets reach nearly $23 trillion, up more than $3 trillion from 2012 and more than double industry assets at the market's nadir in 2008," Michael Rawson, analyst for Morningstar's manager research team, said. "Although 2013 inflows of $976 billion are only slightly higher than the previous record set in 2009, their composition is vastly different. Investors have rotated out of fixed-income investments, which garnered the majority of inflows over the last five years, and into equities."

Other highlights from Morningstar's Global Flows Report include:

  • Vanguard dominated worldwide flows again in 2013, as it did in 2012. The firm took in $143 billion and now manages $2.3 trillion in long-term mutual fund and exchange-traded fund (ETF) assets. On the other side of the spectrum, PIMCO, the beneficiary of the long bond bull market, saw outflows of $29 billion for the year as investors' fear of rising interest rates prompted a long-anticipated exodus from bond funds. 88% of PIMCO's mutual fund and ETF assets globally resided in fixed-income products at year end. Fixed-income funds attracted inflows of $134 billion in 2013, down sharply from $602 billion in 2012.  
  • Equity funds enjoyed inflows of $567 billion globally and an organic growth rate of 6%, the fastest since Morningstar began tracking worldwide flow data in 2007. Allocation funds had a strong year with inflows of $220 billion, driven by double-digit growth in Europe and among cross-border funds. Alternative funds collected $97 billion, more than doubling their 2012 showing; organic growth rates for the alternative category group exceeded 30% in the United States, Asia, and within cross-border funds.
  • Among equity funds, passive funds continued to gain share in most regions in 2013. This secular shift has been driven largely by the increasing awareness among investors of the role of cost in investment outcomes. Another growth factor is the adoption of ETFs among advisors in the United States, although ETFs in Europe are having a tougher time making such inroads.
  • Globally, assets in more than 11,000 truly new open-end funds—those that are not merely new share classes of funds that incepted before Jan. 1, 2013—reached $605 billion in 2013. Luxembourg was the domicile of choice in terms of assets under management, if not number of funds. By year's end, assets of $119 billion resided in the 896 truly new products introduced in Luxembourg. Meanwhile, 3,256 fund share classes domiciled in the duchy with assets of $57 billion merged or liquidated during the year.

Morningstar's report examines each key market in detail, analyzing flows by broad category group, Morningstar Category, fund group, fund, Morningstar Rating™, Morningstar Analyst Rating™, and other dimensions. The data are based on assets reported by more than 2,400 fund groups across 74 domiciles, representing more than 56,000 fund portfolios encompassing more than 174,000 share classes. Morningstar estimates net flow by computing the change in assets not explained by the performance of the fund. Click here for a full explanation of Morningstar's methodology.

To view the complete report, please visit http://www.global.morningstar.com/globalflows2013. For more information about Morningstar Asset Flows, please visit http://global.morningstar.com/assetflows.

The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

About Morningstar, Inc.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offers an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. Morningstar provides data on approximately 446,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 10 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its registered investment advisor subsidiaries and had approximately $159 billion in assets under advisement and management as of Dec. 31, 2013. The company has operations in 27 countries.

©2014 Morningstar, Inc. All Rights Reserved.

MORN-R

Media Contact:
Carling Spelhaug, + 1 312-696-6150 or carling.spelhaug@morningstar.com

SOURCE Morningstar, Inc.



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