Institutional investors turn back to equity funds -Lipper

NEW YORK, Aug 2(Reuters) - Institutional investors turned
back to equity funds in the week ended Aug. 1, although retail
investors exited equity funds for the second week in a row, data
from Thomson Reuters' Lipper service showed on Thursday.
Equity funds recorded net inflows of $5.878 billion in the
week, including a net $8.867 billion from exchange traded funds.
In contrast, excluding ETFs, retail investors sold a net
$2.989 billion of equity funds, accelerating their exit from the
previous week.
ETFs are generally believed to represent the investment
behavior of institutional investors, while mutual funds are
thought to represent the retail investor.
The split in behavior between institutional and retail
investors could be due at least partly to market volatility, as
markets search out a direction against an uncertain global
backdrop, said Jeff Tjornehoj, head of Americas Research at
Lipper.
"Without any momentum, a (mutual) fund investor feels
trapped in their decision. They're not buying intraday, they
have to make a decision that will only be known tomorrow,"
Tjornehoj said. "ETF investors are more likely to jump in and
jump out, and that's the nature of that vehicle."
The S&P 500 gained 2.78 percent for the reporting
week, driven in part by hopes that global policymakers would
step in to boost struggling economies.
Money market funds notched net outflows of $4.365 billion.
Since mid-June, those funds have alternated weeks of net inflows
and outflows.
Taxable bond funds, something of a safe haven in the record
low interest rate environment, saw a net entry of $3.41 billion,
the fourth straight week of gains.
Net buying of $401 million took corporate high-yield funds
to net inflows for an eighth straight week. Investment grade
corporate bond funds pulled in a net $733 million, a slight dip
from recent weeks.
Municipal bond funds saw net inflows of $504 million, a 16th
straight week of net gains.
Excluding ETFs, equity income funds pulled in a net $272
million, slightly more than last week. Net inflows rise to $388
million when ETFs are included.
Equity income funds have been relatively consistent gainers
over recent years, providing an alternative for yield-hungry
investors balking at record low interest rates.
The weekly Lipper fund flow data is compiled from reports
issued by U.S.-domiciled mutual funds and exchange-traded funds.
The following is a broad breakdown of the flows for the
week, including exchange-traded funds (in $ billions):

Sector Flow Chg % Assets Count
($Bil) Assets ($Bil)
All Equity Funds 5.878 0.22 2,741.106 10,222
Domestic Equities 6.204 0.30 2,089.097 7,645
Non-Domestic Equities -0.326 -0.05 652.009 2,577
All Taxable Bond Funds 3.410 0.24 1,456.916 4,697
All Money Market Funds -4.365 -0.19 2,269.465 1,421
All Municipal Bond Funds 0.504 0.16 308.625 1,353