Editor's note: This is adapted from the Morningstar Direct U.S. Asset Flows Commentary for January 2021. Download the full report.
While the performance of most major asset classes took a step back in January 2021 following a stellar 2020, investor preferences remained largely consistent. Long-term mutual funds and exchange-traded funds picked up $95 billion in new assets, marking the 10th consecutive month of inflows since the $326 billion exodus from those funds in March 2020.
Most of January's inflows again found their way to passively managed funds, which took home $55 billion. ETFs--many of which are passively managed--raked in $58 billion during the month versus $37 billion for open-end mutual funds, marking the 30th time they've had the advantage over mutual funds in the prior 36 months.