A China-focused ETF shop's net flows jumped by more than $1 billion last month, even as small firms' combined flows returned to positive territory last month, according to the latest data from the folks at a publicly traded investment research firm.

Jonathan Krane KraneShares Founder, CEO

This article draws from Morningstar Direct data for July 2023 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 161 firms (down year-over-year from 166 in July 2022) with between $1 billion and $10 billion each in long-term fund AUM.

Small firms had $497 billion in total long-term fund AUM across 3,531 funds as of July 31, 2023, accounting for 1.93 percent of overall industry long-term fund AUM. That compares with $499 billion, 3,611 funds, and 2 percent of industry AUM on June 30, 2023, and with $517 billion and 2.14 percent of AUM on July 31, 2022.

73 of those small fund firms brought in net inflows last month. That's up month-over-month from 56 in June 2023 and up Y/Y from 63 in July 2022.

KraneShares took the lead last month, thanks to an estimated $917 million in net July 2023 inflows, up M/M from $96 million in net June 2023 outflows and up Y/Y from $390 million in net July 2022 outflows. Other big July 2023 inflows winners included: Diffractive Managers Group F/m, $280 million (up M/M from negligible inflows, up Y/Y from $4 million in net outflows); BondBloxx, $185 million (up M/M from $114 million, up Y/Y from flat flows); Simplify, $146 million (down M/M from $543 million, up Y/Y from $8 million in net outflows); and Distillate Capital, $126 million (up M/M from $23 million, up Y/Y from $32 million).

F/m led the way last month proportionately, thanks to net July 2023 inflows equivalent to 13.3 percent of its AUM. Other July 2023 inflows winners included: KraneShares, 9.8 percent; and Disiliate, 9.6 percent.

F/m also continues to lead the 2023 inflows pack so far, thanks to an estimated $1.625 billion in net year-to-date inflows as of July 31. Other big YTD inflows winners included: BondBloxx, $1.421 billion; and Fuller & Thaler, $961 million.

On the flip side, USCF took the outflows lead last month, thanks to an estimated $282 million in net July 2023 outflows, up M/M from $270 million in June 2023 but down Y/Y from $544 million in July 2022. Other big July 2023 outflows sufferers included: LoCorr, $154 million (down M/M from $168 million, down Y/Y from $126 million in net inflows); Matthews Asia, $152 million (up M/M from $63 million, up Y/Y from $45 million); Aster's Meridian, $144 million (up M/M from $2 million, up Y/Y from $22 million); and U.S. Global Investors, $142 million (up M/M from $50 million, up Y/Y from $94 million).

Highland led the outflows pack proportionately last month, thanks to estimated net July 2023 outflows equivalent to 9 percent of its AUM. Other big July 2023 outflows sufferers included: USCF, 7.9 percent; and Matthews Asia, 6.5 percent.

So far in 2023, Bridgeway leads the outflows pack, thanks to an estimated $833 million in net YTD outflows as of July 31. Other big YTD outflows sufferers included: JOHCM, $682 million; and U.S. Global Investors, $629MM.

As a group, small fund firms brought in $723 million in net July 2023 inflows, equivalent to 0.15 percent of their combined AUM and accounting for 2.23 percent of overall industry inflows. That compares with $547 million in net outflows and 0.11 percent of AUM in June 2023, and with $2.41 billion in net outflows, 0.47 percent of AUM, and 18.55 percent of industry outflows in July 2022.

So far in 2023, small fund firms have suffered $326 million in net outflows YTD as of July 31. That's equivalent to 0.07 percent of their combined AUM.

Across the entire industry, the 779 firms tracked by the M* team brought in $32.39 billion in net July 2023 inflows, equivalent to 0.13 percent of its $25.75 trillion in AUM across 42,167 funds. That compares with $36.029 billion in net inflows, 0.14 percent, $24.973 trillion in AUM, and 42,054 funds in June 2023, and with $12.991 billion in net outflows, 0.05 percent, and $24.166 trillion in AUM.

Active funds suffered an estimated $24.413 billion in net July 2023 outflows, down M/M from $31.238 billion in June 2023 and down Y/Y from $58.766 billion in July 2022. On the flip side, passive funds brought in $56.803 billion in net July 2023 inflows, down M/M from $67.267 billion but up Y/Y from $45.732 billion.

As of July 31, the industry has brought in $70.566 billion in net 2023 inflows. That's equivalent to 0.27 percent of its combined AUM. 

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