US open-end mutual funds gathered nearly $41 billion in assets in April, although money market funds continued to lose assets; meanwhile, net inflows into exchange traded funds were $12.2 billion last month, with positive flows across all asset classes, according toMorningstar, an independent research firm.

The flows data suggests investors are increasing their appetite for risk at the expense of money market funds.

Net sales of mutual funds in April brought year to date inflows to $165.1 billion, well ahead of last year’s start when inflows were $51 billion in the first four months. The $118.8 billion loss in assets sustained by money market funds means that, year to date, these funds have lost $443.0 billion in assets - a figure greater than the total outflows for the whole of last year.

Among equity funds, domestic stock funds started to regain attention from US investors as they put a net $6.3 billion into the sector in April: the first time US stock funds saw positive monthly flows since May 2009, when the stock market turned around following the crisis.

However, taxable bond-funds remained the best selling open-end mutual funds with inflows of $22.1 billion in April, while municipal bond-funds saw a weak inflow of $989 million and target-date funds gathered $20.5 billion in assets. Real estate funds, meanwhile, had their strongest start to the year since 2007, accumulating $1.5 billion in assets.

In the ETF sector, April’s net sales of $12.2 billion brought year to date sales to $19.9 billion. Last year as whole ETFs gained $104.1 billion in assets.

Small- and mid-cap US ETFs saw inflows of $1.9 billion and $976 million respectively, while large-cap ETFs experienced outflows of $1.5 billion. This outflow was led by significant outflows of around $4.6 billion from SPDR SandP 500 SPY, a State Street Global Advisors fund linked to the price and dividend yield of the S&P 500, according to Morningstar.

Meanwhile, taxable bond-ETFs had inflows of $964 million as short-term bond ETFs took $517 million of new assets last month, showing investor preference for the short end of the yield curve, said Morningstar.  

In terms of fund groups, on the mutual side Vanguard gathered the most assets last month, at $8.6 billion, while Hotchkis and Wiley, Matthews Asia, and Osterweis also had strong inflows. On the ETF side, Vanguard – the third biggest provider in terms of ETF assets – also gained ground, taking market share from its biggest competitors iShares and State Street, according to Morningstar’s data.

Other recent research by the firm, analyzing data over a longer time period, suggests US investors are becoming more aware of cost in their choice of fund. The data shows that funds with an expense ratio at least 20 per cent below the broad group average have gathered $1,093 billion over the last five years, while funds with fees in the range of 20 per cent above or below the average have gathered $66 billion, and the most expensive funds with expense ratios at least 20 per cent above the average have had $86 billion of client assets withdrawn.