U.S. bond funds see renewed demand after weakness -ICI

Wed Nov 14, 2012 4:47pm EST

By Sam Forgione
    NEW YORK, Nov 14 (Reuters) - Investors in U.S.-based mutual
funds revived their appetite for bond funds in the latest week
while continuing to take less money out of stock funds, data
from the Investment Company Institute showed on Wednesday. 
    Bond funds attracted estimated net inflows of $7.5 billion
in the week ended Nov. 7, the most in three weeks, according to
ICI, a U.S. mutual fund trade organization. The funds attracted
just $2.6 billion in inflows the previous week, which showed the
weakest demand since early July. 
    Stock funds, which have attracted weekly inflows just eight
times this year, had outflows of $1.82 billion, the least in 16
weeks. Funds that hold foreign stocks had inflows of $300
million, the first week of new money for the funds in 16 weeks. 
    The benchmark S&P 500 index fell 1.25 percent over
the reporting period in response to disappointing corporate
earnings, concerns about the "fiscal cliff" of tax hikes and
spending cuts in the United States, and the European
Commission's forecast of slow growth in the euro zone next year.
    Hybrid funds, which can invest in stocks and fixed-income
securities, had inflows of $553 million after suffering outflows
of $673 million the previous week. 
    The following table shows a breakdown of ICI flows for the
past five weeks (all figures in the millions of dollars) :
               10/10/12  10/17/12  10/24/12  10/31/12  11/7/2012
 Total Equity    -2,606    -2,492    -2,470    -2,486     -1,819
    Domestic     -2,310    -2,123    -1,850    -1,937     -2,119
    World          -296      -369      -619      -549        300
 Hybrid*            273       833     1,322      -673        553
 Total Bond       9,498     8,825     6,599     2,588      7,502
    Taxable       8,152     7,556     5,651     2,207      6,418
    Municipal     1,345     1,269       948       381      1,084
 Total            7,165     7,166     5,452      -571      6,236
  *Hybrid funds can invest in stocks and/or fixed-income
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