Morningstar has reported estimated US mutual fund asset flows for January 2014.

Traditionally a strong month for flows as investors contribute to IRAs and invest bonus money and firms make 401(k) contributions, January saw long-term mutual funds collect new assets of US$39.2 billion. Stock funds garnered inflows of US$28.6 billion, their strongest monthly intake since January 2013.

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Municipal-bond funds saw their first monthly inflows since last February. Morningstar estimates net flow by computing the change in assets not explained by the performance of the fund. Click here for a full explanation of Morningstar’s methodology.

Additional highlights from Morningstar’s report on mutual fund flows:

  • International-equity funds, which led all category groups in 2013 inflows, continued the trend in January. The category group topped all others with new assets of US$17.4 billion for the month.
  • Nontraditional bond and bank loan remained the top fixed-income categories as core bond funds continued to see outflows. Long/short equity and market neutral funds within the alternatives category group saw strong January inflows of US$2.9 billion and US$1.0 billion, respectively, an indication that investors want to avoid interest-rate risk but are hesitant about pouring more money into higher-risk or unhedged equity positions.
  • After recording an average monthly inflow of US$1.1 billion between January 2009 and May 2013, emerging-markets bond funds have shed an average of US$1.4 billion per month. Category assets peaked at US$86.7 billion in April 2013, but have fallen to US$66.3 billion as of the end of January.
  • Goldman Sachs Strategic Income led the nontraditional bond category in terms of inflows and was among the top-flowing funds overall in January. The fund has beaten the Barclays Aggregate Bond Index by four percentage points over the last year. Despite being closed to new investors, Oakmark International, which has a Morningstar Analyst Rating of Gold, also brought in an impressive US$1.5 billion.

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