July was the third consecutive month of outflows from U.S.equity mutual funds, according to Morningstar.

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The increased pace of outflows was likely a symptom of jitterymarkets. Morningstar estimates that $11.4 billion flowed fromequity funds in July, up from $8.3 billion in June and $6.9 billionin May.

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Overall fund flow was positive in July, at $14.4 billion. Butthat total is noticeably lower than previous months, according tothe monthly report.

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For the third month in a row, taxable-bond funds saw thegreatest inflows among all category groups.

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The high-yield bond category saw the largest outflows.

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The outflow from U.S. equity funds belied overall equity trends.Vanguard Total Stock Market Index, Vanguard Institutional Index andVanguard Total International Stock Index recorded inflows of $2.6billion, $2.2 billion, and $1.8 billion, respectively.

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Vanguard was the top performing fund-provider, with of the four of the five funds with the mostinflows.

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PIMCO’s Long Term U.S. Government Fund was the other of the topfive-flowing funds for July.

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But overall, investors continued to leave PIMCO funds, whichexperienced outflows in July for the 14th consecutivemonth, though July’s losses were the smallest during that period.PIMCO’s flagship Total Return fund saw $830 million flow out inJuly, and improvement over the $4.4 billion-average of outflowsduring the past 12 months, said Morningstar.

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In spite of the overall outflow trend in U.S. equities, Vanguard’s largest index funds attracted strong inflows,suggesting investors’ attraction to low-fee, passively managedfunds.

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Fidelity’s performance lagged all other fund providers, due tooutflows from two flagship U.S. equity funds, according to thereport.

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Flows into lower costing passively managed mutual fundsdominated actively managed funds. More than $14 billion flowed intopassive funds, while only $300 million flowed into activefunds.

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