The Winners and Losers of April’s Recovery

BlackRock won the most mutual fund assets, while Vanguard experienced the worst outflows, according to Cerulli.

Alex Kraus/Bloomberg

Alex Kraus/Bloomberg

Investors yanked $335 billion out of U.S. mutual funds in March as the coronavirus pandemic infected the country’s economy. As markets began to recover in April, only some of the largest asset managers were successful in regaining investors, according to Cerulli Associates.

“While equity markets rebounded in April, posting their best month since the 1970s, the top-10 managers continued to bleed assets, losing a combined $14 billion,” the consulting firm said in a new report analyzing U.S. fund flows.

The worst hit — on an absolute basis — was Vanguard, the largest U.S. mutual fund manager with $3.8 trillion in assets as of April. The indexing giant recorded $4.6 billion of outflows from its mutual funds in April, according to the report, which cited Morningstar data. A spokesperson for Vanguard said Tuesday that the Morningstar figures exclude the firm’s money market funds, collective investment trusts, and stable value funds, which attracted positive net flows in April.

Invesco faced similarly steep redemptions, with net outflows of $4.5 billion. With total U.S. mutual fund assets of $270.4 billion as of April, Invesco had the worst outflows relative to its asset base among the ten largest managers, the report shows. The firm’s mutual fund assets were down 20.6 percent year-over-year in April, Cerulli said.

Vanguard’s U.S. mutual fund assets, by comparison, had declined 0.7 percent from April 2019.

Other losers in April included Franklin Templeton Investments and Dimensional Fund Advisors, which each recorded net outflows of more than $3 billion. Mutual fund assets at both firms were down by about 16 percent for the 12-month period ending in April.

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Overall, U.S. mutual funds experienced $29.3 billion in net redemptions in April, with actively managed funds accounting for $25.6 billion in outflows.

Still, some of largest mutual fund managers managed to attract inflows in the month following the market crash. BlackRock was the biggest winner, drawing nearly $3.8 billion in net mutual fund flows in April. The firm likely benefitted from being tapped by the U.S. Federal Reserve to assist with the central bank’s bond-buying program.

Other beneficiaries of the market recovery included Prudential Financial’s PGIM funds, which recorded net inflows of over $2 billion, and the asset management arm of JPMorgan Chase & Co., which attracted $1.9 billion in mutual fund flows.

Providers of U.S. exchange-traded funds also largely benefitted in April, with ETFs attracting $45 billion in net flows during the month, according to the report. Notably, ETFs had also recorded positive flows — totaling $9.7 billion — in March, when mutual funds faced widespread redemptions.

Among ETF sponsors, State Street reported the highest inflows in April, totaling over $16 billion. BlackRock’s iShares, the ETF market leader with $1.5 trillion in assets as of April, brought in $8.5 billion in flows that month. Vanguard recorded just under $5 billion in net flows in April, but has the most new ETF assets this year, with net flows of about $52.6 billion since January.

At the other end of the spectrum, the ETF provider with the highest monthly outflow was VanEck, which had just over $1 billion in net redemptions, according to Cerulli. VanEck was followed by Charles Schwab and WisdomTree, which each recorded outflows of more than $700 million in April.