Investors added $86.5 billion to long-term open-end mutual funds in January, while 72 of 93 open-end categories recorded inflows, fresh Morningstar data shows.

Morningstar said January was “by far the largest one-month inflow in record”, with inflows of $28.6 billion for exchange-traded funds. Meanwhile, all asset classes and each of the top 10 open-end fund providers saw long-term fund inflows, the Nasdaq-listed firm said.

“Market observers have been waiting for a sign that the multi-year trend of investors buying fixed income while selling US stocks would reverse in a so-called ‘great rotation,’” said Mike Rawson, a fund analyst on Morningstar’s passive funds research team.

However, US stock funds experienced slower organic growth than any other major asset class during the month, Rawson added. Seasonal and one-time factors like lump-sum contributions to retirement accounts, along with acceleration of dividend payments suggest that “claims of a paradigm shift in investor behavior may be premature,” he said.  

The intermediate-term bond category logged the greatest inflows in January, with $10.5 billion. This continued a trend that Morningstar said “has persisted for more than four years”, demonstrating that investors “have not abandoned fixed income".

With inflows of $31 billion in January, taxable bond funds “led all asset classes”, followed by international stock funds, which garnered $18.4 billion during the month.