U.S. bond funds gain most in 3 weeks ahead of budget deal -ICI
NEW YORK, Jan 2 (Reuters) - Investors in U.S.-based mutual funds committed the most money to bond funds in three weeks ahead of final discussions in Washington surrounding the "fiscal cliff" of tax hikes and spending cuts, data from the Investment Company Institute showed on Wednesday. Investors poured an estimated $2.46 billion into bond funds in the week ended Dec. 26, more than five times the previous week's inflows of $427 million, said ICI, a U.S. mutual fund trade organization. Stock funds, meanwhile, had net outflows of $3.27 billion, an improvement from the prior week when the funds suffered outflows of $5 billion. The benchmark S&P 500 index fell 1.1 percent over the reporting period as U.S. lawmakers remained in gridlock over the fiscal cliff, which President Barack Obama and Congress averted this week with a compromise. The S&P surged 2.54 percent on Wednesday in the first day of U.S. trading since the deal was reached. Municipal bond funds still posted outflows, but the tide eased, with outflows of $685 million, down from the prior week's outflows of $3.26 billion. Hybrid funds, which can invest in stocks and fixed income securities, gained $757 million in new cash, the most since the week ended Oct. 24 and following outflows of $20 million the previous week. The following table shows a breakdown of ICI flows for the past five weeks (all figures in millions of dollars) : 11/28/12 12/5/12 12/12/12 12/19/12 12/26/2012 Total Equity -632 -7,180 -8,479 -4,996 -3,274 Domestic -619 -5,858 -7,233 -5,284 -3,637 World -13 -1321 -1,246 289 363 Hybrid* 144 -71 119 -20 757 Total Bond 4,255 5,157 1,787 427 2,457 Taxable 2,956 4,084 1,576 3,690 3,141 Municipal 1,299 1074 211 -3,263 -685 Total 3,766 -2,093 -6572 -4,590 -61 *Hybrid funds can invest in stocks and/or fixed income securities.