US-based stock mutual funds gain for third straight week -Lipper

Thu Jan 24, 2013 8:18pm EST

By Sam Forgione
    NEW YORK, Jan 24 (Reuters) - Investors in U.S.-based funds
committed $3.66 billion to stock mutual funds in the latest
week, showing continued support for stocks from retail investors
this year, data from Thomson Reuters' Lipper service showed on
Thursday. 
    The latest inflows, for the week ended Jan. 23, mark the
third consecutive week of big gains for stock mutual funds. They
were largely unchanged from inflows of $3.75 billion the
previous week, and amount to roughly half of the huge inflows of
$7.53 billion that jumpstarted the year.
    "Investors are willing to let their bets ride," said Jeff
Tjornehoj, head of Americas Research at Lipper, on the continued
cash surge into stock mutual funds.
    Bond funds, meanwhile, attracted $3.9 billion in inflows
after raking in $4.63 billion the prior week. Bond mutual funds
reaped $3.54 billion in new cash, while bond exchange-traded
funds gained a modest $356.3 million.
    Investors in stock mutual funds continued to favor
international stocks while still directing a substantial amount
of cash toward U.S. stocks. Mutual funds that specialize in U.S.
stocks attracted $1.42 billion, while those that hold
international stocks attracted $2.24 billion.
    The strong turnout for stock mutual funds again failed to
apply to ETFs overall. Stock ETFs had total outflows of $735
million, as investors pulled roughly $3.1 billion from ETFs that
hold U.S. stocks. Those that hold international stocks, however,
stood out with inflows of $2.35 billion.
    Investors continued to pull money out of the SPDR S&P 500
ETF, with $4.36 billion leaving the fund in the latest
week.
    "Apple is a big holding in the fund, so this could be a vote
against Apple," Tjornehoj said. Shares in Apple,, which
is the world's most valuable publicly traded company, fell 8
percent on Wednesday after the company recorded quarterly
revenue that slightly missed expectations while sales of its
iPhone came in weak.
    ETFs are generally believed to represent the investment
behavior of institutional investors, while mutual funds are
thought to represent the retail investor.
    The benchmark S&P 500 rose 1.5 percent over the
reporting period. Signals that Republican leaders would pass a
nearly four-month extension of the U.S. debt ceiling, upbeat
data on U.S. unemployment claims, and strong earnings from
technology companies boosted sentiment.
    Investors put $2.1 billion to work in funds that hold
investment-grade bonds, showing continued preference for higher
quality over riskier high-yield bond funds, which attracted
$511.6 million.
    "I think we can have a market where equities and bonds both
get inflows," Tjornehoj said. He added that investors who fear
stocks tend to favor investment-grade bonds for their reduced
risk.
    Flexible funds, which can invest in both stocks and bonds
worldwide, also continued to win favor with inflows of $1.31
billion. In the previous week, the funds attracted $1.47
billion.
    The weekly Lipper fund flow data is compiled from reports
issued by U.S.-domiciled mutual funds and exchange-traded funds.
    The following is a broad breakdown of the flows for the
week, including exchange-traded funds (in $ billions): 
 Sector                    Flow Chg  %       Assets     Count
                           ($Bil)    Assets  ($Bil)     
 All Equity Funds          2.928     0.10    3,069.047  10,109
 Domestic Equities         -1.657    -0.07   2,271.570  7,501
 Non-Domestic Equities     4.585     0.58    797.478    2,608
 All Taxable Bond Funds    3.900     0.25    1,537.730  4,804
 All Money Market Funds    -4.830    -0.20   2,387.642  1,357
 All Municipal Bond Funds  0.871     0.27    325.638    1,346
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