Investors drain most cash from U.S. stock funds in 6 weeks -ICI

By Sam Forgione
NEW YORK, Nov 21 (Reuters) - Investors in U.S.-based mutual
funds took the most cash out of stock funds in six weeks ahead
of meetings in Washington, D.C. surrounding the looming "fiscal
cliff" of tax hikes and spending cuts, data from the Investment
Company Institute showed on Wednesday.
Stock funds had estimated net outflows of $8.38 billion in
the week ended Nov. 14, the most since early October, said ICI,
a U.S. mutual fund trade organization.
The outflows indicate greater bearishness toward stocks. The
previous week, investors took just $1.84 billion out of the
funds, the least in 16 weeks.
Demand for bond funds was also modestly weaker than the
previous week. The funds had net inflows of $6.61 billion over
the reporting period, showing a dip from the prior week's
inflows of $7.47 billion.
The benchmark S&P 500 stock index fell 2.8 percent
over the reporting period as concerns rose as to whether U.S.
President Barack Obama and Congress could reach a deal to avert
the fiscal cliff of tax increases and spending cuts set to begin
at the start of next year.
Obama met with top U.S. lawmakers last Friday in the first
face-to-face meeting on the fiscal cliff, and the parties hope
to start serious negotiations after the Thanksgiving holiday on
Thursday.
The harsh sentiment toward stocks also hit hybrid funds,
which can invest in stocks and fixed income securities. The
funds suffered outflows of $1.22 billion, t h e most since early
June.

The following table shows a breakdown of ICI flows for the
past five weeks (all figures in the millions of dollars) :

10/17/12 10/24/12 10/31/12 11/7/12 11/14/2012
Total Equity -2,492 -2,470 -2,486 -1,837 -8,383
Domestic -2,123 -1,850 -1,937 -2,137 -6,629
World -369 -619 -549 301 -1,754
Hybrid* 833 1,322 -673 553 -1,218
Total Bond 8,825 6,599 2,588 7,470 6,613
Taxable 7,556 5,651 2,207 6,387 5,350
Municipal 1,269 948 381 1,084 1,263
Total 7,166 5,452 -571 6,187 -2,988
*Hybrid funds can invest in stocks and/or fixed income
securities.