Demand lags for US stock, bond funds on 'fiscal cliff' worry-ICI

Wed Nov 28, 2012 5:30pm EST

By Sam Forgione
    Nov 28 (Reuters) - Investors in U.S.-based mutual funds took
the most money out of stock funds in seven weeks and decreased
commitments to bond funds in the latest week as budget talks
continued, data from the Investment Company Institute showed on
Wednesday. 
    Stock funds had estimated net outflows of $8.82 billion in
the week ended Nov. 20, the most in seven weeks, said ICI, a
U.S. mutual fund trade organization.
    Bond funds, meanwhile, saw less demand with net inflows of
$4.5 billion after raking in $6.62 billion in investor cash the
previous week. 
    The benchmark S&P 500 stock index rose 2.38 percent
over the reporting period despite data showing that the euro
zone entered a recession in the third quarter and uncertainty
over how U.S. lawmakers would address the looming "fiscal cliff"
of tax hikes and spending cuts. 
    Hybrid funds, which can invest in stocks and fixed income
securities, suffered outflows of $1.19 billion after investors
pulled $1.22 billion out of the funds the previous week. 
    The following table shows a breakdown of ICI flows for the
past five weeks (all figures in the millions of dollars) :
               10/24/  10/31/12  11/7/12  11/14/12  11/20/2012
                    2                               
 Total Equity  -2,470    -2,486   -1,837    -8,385      -8,819
    Domestic   -1,850    -1,937   -2,137    -6,631      -7,509
    World        -619      -549      301    -1,754      -1,310
 Hybrid*        1,322      -673      553    -1,218      -1,194
 Total Bond     6,599     2,588    7,470     6,615       4,498
    Taxable     5,651     2,206    6,387     5,352       3,131
    Municipal     948       381    1,084     1,263       1,366
 Total          5,452      -571    6,187    -2,988      -5,515
 *Hybrid funds can invest in stocks and/or fixed income
securities.