Offerings from American Funds, Fidelity Investments and The Vanguard Group Inc. had the biggest net outflows last year, according to Morningstar Inc.
Offerings from American Funds, Fidelity Investments and The Vanguard Group Inc. had the biggest net outflows last year, according to Morningstar Inc.
The American Funds Growth Fund of America Ticker:(AGTHX) topped the list in outflows with $12 billion, followed by Fidelity's Equity Income Fund Ticker:(FEQIX) which had $7.84 billion in outflows.
American Funds Capital World Growth and Income Fund Ticker:(CWGIX) and American Funds Capital Income Builder Ticker:(CAIBX) came in third and fourth place with $5.934 billion and $5.898 billion in outflows, respectively. In fifth place, Fidelity's Diversified International Fund lost $5.543 billion.
Overall, six of the 10 funds with largest outflows were managed by American Funds, which is owned by Capital Research and Management Co. Two are managed by Fidelity. Another two, the Vanguard European Stock Index Fund Ticker:(VEURX) and the Vanguard Five Hundred Stock Index Fund, Ticker: VFINX) are managed by The Vanguard Group Inc.
Despite $50 billion in outflows last year, American Funds remains one of the largest fund complexes with $857 billion in assets under management.
Growth Fund of America's redemption rate as a percentage of assets is in keeping with the industry average, said American Funds spokesman Chuck Freadhoff.
The American Funds portfolios on this list are all large funds, he said.
“The question is: ‘Are investors being harmed because of the redemptions?'” Mr. Freadhoff asked.
Large outflows of Fidelity's Equity Income Fund are due largely to underperformance, said Russel Kinnel, director of research at Morningstar. The fund underperformed the S&P 500 for the past one-, three- and five-years periods, according to Morningstar.
“The fund is a long-running disappointment,” Mr. Kinnel said.
The managers of the Equity Income Funds are very experienced, said Sophie Launay, a Fidelity spokeswoman.
“Steve Petersen is one of our longest-tenured investment professionals, and Equity Income has bested 50% of its Morningstar peers during Mr. Petersen's tenure,” she said of the fund's manager.
Similarly, Fidelity's Diversified International Fund, managed by Bill Bower, a 16-year Fidelity veteran, has beaten 88% of its peers during his tenure, Ms. Launay said.
Last year, Vanguard replaced the European Stock Index Fund in its target date fund with the Total International Stock Index Fund, which may account for the fund's $5.16 billion in outflows, said John Woerth, a spokesman. At the same time, the Vanguard Total International Stock Index Fund saw $21.84 billion in inflows, the second-largest gain in 2010, which may also be attributable to the changes in Vanguard's target date lineup.
