Equity Funds Took in $22B Last Month: Morningstar

November was a standout month for equity inflows into U.S. mutual funds and ETFs as the stock market continued to rally.  

Investors added roughly $22 billion into equity funds last month, making November their largest month of inflows since the funds brought in $35 billion in May 2022. Passive large funds took in $9 billion in November, according to Morningstar’s monthly U.S. mutual fund and ETF fund flows for November.  

Inflows surged as the S&P 500 gained 9% in November on the heels of the Federal Reserve pausing its interest-rate increases and Congress passing a budget that prevented a government shutdown. The tech-heavy Nasdaq-100 rose 11% in November, ending its streak of three straight months of losses. 

“When you put [the flows] into historical perspective, it's still not on par with the caliber of flows that we saw in 2021, for example, but after sharp outflows last year and kind of a touch and go 2023, it’s a positive development,” said Ryan Jackson, a research analyst at Morningstar. 

While stock funds overall had a stellar month, international equities foundered, losing about $3 billion in November. Russia’s invasion of Ukraine has continued to hurt globally focused funds, according to the report.  

Jackson pointed to decreased demand from investors for sector equity funds, which have seen outflows every month of the year except for July. The funds bled $800 million in outflows in November.  

ESG ETFs and Market Rally

Sustainability-focused funds also took a hit as investors drained $1.5 billion from the funds in November as the group saw continued outflows for its fifth month in a row. Sustainable funds have overall lost over $10 billion year to date.  

“[Sustainable outflows] is why November was so surprising to us, because for the first time, we saw equity funds have a strong month pulling in a lot of money, but people are still moving out of those sustainable funds,” said Jackson. “That is a telltale sign that the appetite for ESG funds has diminished.” 

Contact Lucy Brewster at [email protected].