Fidelity Takes Fund Inflows Crown in September

The firm drew $23 billion in ETFs and mutual funds, according to a Morningstar report.

Fidelity Investments, an ETF issuer with $37 billion in 58 ETFs, surpassed its asset-management rivals in attracting the most inflows into its funds in the third quarter.  

The company brought in $23 billion into its index-tracking funds, as the fund industry at large bled $12 billion in assets, according to Morningstar’s September fund-flows report.  

“For so long, it was either Vanguard or iShares oscillating back and forth between the leader of the fund universe,” said Morningstar analyst Ryan Jackson.  

Analysts at Morningstar pointed to Fidelity's move toward offering lower cost passive investment vehicles as a reason for its boom in flows. The zero-fee Fidelity 500 Index Fund brought in nearly $8 billion across the quarter, leading the firm’s inflows. 

“The strategic pivot [Fidelity] made to say, ‘We’re not just going to offer up these active strategies, we’re willing to adapt with the times and offer some of these really cheap, and in many instances, zero-fee passive strategies’ is quite the change,” Jackson said.

Fidelity’s largest ETF is the Fidelity MSCI Information Technology Index ETF (FTEC) with about $7.2 billion in assets.  

Mild Month for Flows 

September saw the continuation of ETFs gaining inflows from mutual funds, even as fund flows in general were lackluster. Actively managed ETFs brought in nearly $11 billion in September and have drawn $77 billion in inflows, year to date. Passively managed long-term funds attracted $30.6 billion in September, while passively managed sector ETFs were drained of $5.6 billion during the month.  

ETFs and mutual funds overall lost $12 billion, the fifth straight month of outflows this year.

“In the grand scheme of things, $12 billion is not huge outflows by any stretch, but if you compare it to what we saw in 2020 and 2021, it’s pretty mild,” Jackson said. “It reflects the investor trepidation.”  

JEPI Still Reigns 

The JPMorgan Equity Premium Income ETF (JEPI) is still the undisputed cash cow of active ETFs, and yet its more recent sibling fund, the JPMorgan Nasdaq Equity Premium Income (JEPQ), is also a huge driver of ETF inflows, according to Morningstar’s report. JEPQ raked in $4.9 billion over the past year, making it second in inflows among nontraditional equity funds.  

Contact Lucy Brewster at [email protected].