U.S. stock funds suffer $9.5 bln outflow amid fiscal deal -ICI

Wed Jan 9, 2013 5:48pm EST

NEW YORK, Jan 9 (Reuters) - Investors in U.S.-based mutual
funds pulled the most cash out of stock funds in three months in
the latest week as U.S. lawmakers reached a deal to avert a
"fiscal cliff" of tax hikes and spending cuts, data from the
Investment Company Institute showed on Wednesday.
    Investors pulled an estimated $9.5 billion out of stock
funds in the week ended Jan. 2, the most since early October,
said ICI, a U.S. mutual fund trade organization. The amount was
more than double the previous week's outflows of $3.8 billion.
    Demand for bond funds grew, with investors pumping $3.21
billion into the funds, up modestly from the previous week's
inflows of $2.56 billion. 
    The outflows from stock funds came despite the benchmark S&P
500's 3 percent gain over the reporting period. Markets
rallied after President Barack Obama and Congress reached a
budget deal, although the agreement delayed spending cuts by two
months. Congress must also raise the $16.4 trillion U.S. debt
ceiling next month or risk default.
    Hybrid funds, which can invest in stocks and fixed-income
securities, suffered minor outflows of $152 million over the
weekly period after attracting $774 million in new cash the
prior week. 
    The following table is a breakdown of ICI flows for the past
five weeks (all figures in millions of dollars):
               12/5/12  12/12/12  12/19/12  12/26/12   1/2/2013
 Total Equity   -7,180    -8,479    -5,004    -3,789     -9,501
    Domestic    -5,858    -7,233    -5,292    -3,870     -8,288
    World       -1,321    -1,246       289        81     -1,213
 Hybrid*           -71       119       -20       774       -152
 Total Bond      5,157     1,787       427     2,559      3,214
    Taxable      4,084     1,576     3,690     3,260      2,924
    Municipal    1,074       211    -3,263      -701        291
 Total          -2,093    -6,572    -4,598      -455     -6,439
 *Hybrid funds can invest in stocks and/or fixed income