Small fund firms' marketshare by assets fell last month and year-over-year. Yet their share of industry inflows is on the rise.

Jay Edwin Johnson Trust for Credit Unions President, Treasurer

This article draws from Morningstar Direct data on March 2021 open-end mutual fund and ETF flows, excluding money-market funds and funds of funds. (Other asset management products, like CITs and SMAs, are also not included.) More specifically, this article focuses on the 167 firms (up from 166 in February 2021 and 144 in March 2020) with between $1 billion and $10 billion each in long-term fund AUM.

Small fund firms had $543 billion in total long-term fund AUM as of March 31, 2021, accounting for 2.18 percent of industry AUM. That's down from $548 billion and 2.26 percent on February 28, 2021. And it's up from $491 billion but down from 2.88 percent on March 31, 2020.

101 small fund firms brought in net inflows last month, up from 98 in February 2021 and 32 in March 2020.

Callahan Financial Services' Trust for Credit Unions took the lead last month, thanks to an estimated $964 million in net March inflows, up from $342 million in February 2021 and $169 million in March 2020. Other big March 2021 inflows winners included: KraneShares, $659 million (down month-over-month from $1.143 billion, up year-over-year from $46 million); GQG Partners, $548 million (up MOM from $522 million, up YOY from $186 million); Morningstar itself (which offers a subadvised, multi-manager fund series), $463 million (up MOM from $12 million, up YOY from $301 million); and Credit Suisse, $354 million (up MOM from $192 million, up YOY from $791 million in net outflows).

Trust for Credit Unions also took the lead proportionately last month, bringing in estimated net inflows equivalent to 20.7 percent of its AUM. Other big March 2021 inflows winners included: Advisors Preferred, 17.6 percent; Spyglass Capital Management, 9.1 percent; Morningstar, 8.9 percent; and Kopernik, 8 percent.

For Q1 2021 overall, KraneShares led the pack thanks to an estimated $2.474 billion in net inflows. Other big Q1 inflows winners included: GQG, $1.623 billion; Trust for Credit Unions, $1.557 billion; Amplify ETFs, $1.134 billion; and AdvisorShares, $1.115 billion.

On the flip side, last month was a rough one for IVA Funds, which suffered an estimated $1.21 billion in net March outflows, up from $309 million in February 2021 and up from $531 million in March 2020.* Other big March 2021 outflows sufferers included: Fiera Capital, $719 million (up MOM from $671 million, up YOY from $339 million); USCF, $425 million (up MOM from $394 million, down YOY from $2.099 billion in net inflows); AIG, $196 million (up MOM from $195 million, down YOY from $652 million)**; and Sterling Capital, $184 million (down MOM from $63 million in net inflows, down YOY from $348 million).

IVA also led the small fund firm outflows pack last month proportionately, thanks to estimated net March 2021 outflows equivalent to 94.6 percent of its remaining AUM. Other big outflows sufferers included: Fiera, 63.8 percent; USCF, 9.9 percent; Cambiar, 9.1 percent; and Madison, 5.8 percent.

For Q1 2021 overall, IVA also led the small fund firm outflows pack, thanks to an estimated $1.818 billion in outflows. Other big Q1 outflows sufferers included: Fiera, $1.626 billion; USCF, $1.504 billion; Glenmede, $709 million; and AIG, $622 million.

As a group, the small fund firms brought in an estimated $4.119 billion in net March 2021 inflows, equivalent to about 0.76 percent of their combined AUM and accounting for 2.63 percent of overall industry inflows. That's down from $5.677 billion 1.04 percent of AUM, but up from 2.26 percent of industry inflows, in February 2021. And it's up from $16.728 billion in net outflows, equivalent to 3.42 percent of AUM and 5.14 percent of industry inflows.

In Q1 2021, small fund firms brought in an estimated $13.504 billion in net flows, equivalent to 2.49 percent of their combined AUM and 3.37 percent of overall industry inflows.

Across the entire industry, the 758 fund firms (up from 753 in February 2021 but down from 770 in March 2020) tracked by the M* team brought in a combined $156.503 billion in estimated net long-term fund inflows in March 2021, equivalent to 0.63 percent of long-term fund AUM. That's up from $144.457 billion and 0.6 percent of AUM in February 2021, and it's up from $326.378 billion in net outflows and 1.91 percent of AUM.

Active funds brought in an estimated $42.386 billion in net March 2021 inflows, down from $53.109 billion in February 2021 and up from $309.808 billion in net outflows in March 2020. Passive funds brought in an estimated $114.117 billion in net March 2021 inflows, up from $91.347 billion in February 2021 and up from $16.57 billion in March 2020 outflows.

In Q1 2021, long-term funds brought in an estimated $400.697 billion in net inflows, equivalent to 1.61 percent of their combined AUM.

* Note that IVA filed last month to shutter its funds. The liquidation was scheduled to take effect on April 19.

*** Note that in February AIG unveiled a deal to exit the MF business. Six funds are scheduled to be wound down, and the remaining 18 funds will be taken over buy another fund family (mostly to be merged into existing funds). 

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