Investors have developed a serious aversion to U.S. equity mutual funds, which is upsetting the balance of fund flows, according to Morningstar.

So far this year, investors have yanked $14.6 billion from U.S. equity funds and poured $102 billion into taxable bond funds, Morningstar’s data shows.

There is good reason for this, of course. While the S&P 500 Index has fallen 6.6% this year, U.S. equities dropped 16% in the four weeks ended August 19. By comparison, long bond funds are up 17% so far this year, making them the best-performing fund category.

“It’s been a flight to bonds and away from equities,” Morningstar Analyst Ryan Leggio told

“We’ve seen pressure on stocks due to macroeconomic concerns, so it’s made it a challenge for any portfolio manager to gain ground,” added Todd Rosenbluth, a mutual fund analyst with Standard & Poor’s. “The ones that have done well have been in more defensive sectors, such as healthcare and utilities. Investors are looking for stability and income.”

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.