The report, which examined managed fund asset flows in Australia, Canada, Europe, Japan and the United States, showed investors had a clear preference for passive options over active options in 2013, particularly in terms of equities.
It revealed the Vanguard International Shares Index experienced inflows of around $509 million, while the BlackRock Index International Equity secured inflows of about $430 million.
Morningstar said investors conscious of cost were likely attracted to the two funds due to their “favourably priced global share market exposure”.
The research also showed investors favoured international share funds in 2013 over domestic share funds, with investors shifting $5.79 billion out of Australian share funds and injecting $847 million into global equity strategies.
The two Australian equity funds facing the largest outflows were Ausbil Australian Active Equity, which shed around $634 million in assets during the year while Macquarie Alpha Opportunities, an Australian equity long-short fund, suffered a $686 million decline in its asset base.
Shares funds globally generated an inflow of US$567 billion and an organic growth rate of six per cent.
This is the fastest growth rate since Morningstar first began recording global flow data since 2007.
Out of the actively managed international equities strategies Magellan Global generated the highest flows, securing almost $1.7 billion in 2013, double the inflow of any other single-sector strategy.
Vanguard dominated global flows, however, taking in $143 billion, increasing its assets under management to US$2.3 trillion in long-term managed fund and exchange-traded fund assets.
Pimco experienced the worst outflow, with its funds retracting US$29 billion for the year.
Morningstar said investor fear of rising interest rates likely “prompted a long-anticipated exodus from bond funds”.
