Using data from Morningstar we’ve compiled a list of the twenty mutual funds receiving the largest net cash inflows in 2017:
- Vanguard Total Stock Market Index
- Vanguard 500 Index
- Vanguard Total International Stock Index
- Vanguard Developed Markets Index
- Vanguard Total Bond Market Index
- Vanguard Emerging Markets Stock Index
- Oakmark International
- Prudential Total Return Bond
- American Funds Balanced
- Fidelity U.S. Bond Index
- Strategic Advisors Core Income
- Vanguard Short-Term Investment-Grade Bond
- Dodge & Cox Income
- Vanguard European Stock Index
- Vanguard Intermediate-Term Tax-Exempt Bond
- Vanguard Intermediate-Term Bond Index
- Vanguard Value Index
- Fidelity 500 Index
- Fidelity Total Bond
- Vanguard Short-Term Bond Index
Notice a trend? Of the $256 billion net cash 80% went to index funds. For context if that was the revenue of one company it would land at #2 on the Fortune 500 behind only Walmart.
Scary stuff! It reeks of performance chasing as the FAANGs and their outsized prices skew the cap-weighted indexes artificially higher than underlying fundamentals justify.
An extra gold star for anyone who correctly guesses which funds will suffer the largest net outflows when the pendulum swings back the other way.