October was a big month for outflows from active U.S. equity funds, according to Morningstar, which reported that investors pulled $16.8 billion from actively managed funds, compared with the $8.8 billion of outflows reported last month. Passive funds, on the other hand, continued to gain ground, with investors putting in $20.4 billion, compared with last month's inflows of $19.4 billion.
At $29.1 billion, October saw the greatest level of long-term outflows since August 2015, when they hit $30.3 billion of outflows. According to Morningstar, these outflows represented 0.15% and 0.22% of long-term assets, respectively.
Core strategies like U.S equity outdid specialty or niche equity strategies, with investors pulling $12.6 billion — 1.4% of overall assets — from sector equity funds in October. Real estate funds and technology funds saw the biggest defections, with $3.5 billion and $3.4 billion in outflows, respectively.
Within Morningstar category groups, taxable-bond funds saw their worst month since December 2015, with $14.2 billion of outflows. But ultrashort-bond funds, on the other hand, apparently gained energy from September's Federal Reserve interest rate hike and saw a record $11.3 billion in inflows.
