Investors pull out of US equity funds

US congressInvestors are pulling out of US equities following recent highs as the market rallied.

US equity fund outflows reached $11.4 billion (€8.5 billion) in July, according to Morningstar’s estimated US mutual fund asset flows for July 2014.

This marks a steady increase from $6.9 billion in May and $8.3 billion in June.

Morningstar’s report also showed high-yield bond funds experiencing outflows of $7.9 billion and bank-loan funds facing outflows of $1.9 billion.

Passive funds dominate the market, collecting $14.1 billion in July compared with inflows of $0.3 billion for active funds.

Taxable-bond funds have seen the greatest inflows among all category groups over the past three months, and flows into long-term mutual funds also remained positive in July at $14.4 billion.

Vanguard topped all providers in terms of July inflows, with four of the five top-flowing funds for the month. Vanguard Total Stock Market Index, Vanguard Institutional Index, and Vanguard Total International Stock Index recorded July inflows of $2.6 billion, $2.2 billion, and $1.8 billion, respectively.

In contrast, Fidelity suffered the greatest provider-level outflows due to large redemptions from two of its flagship active US equity funds, the Fidelity Growth Company Fund and Fidelity Contrafund Fund.

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