Stock funds gain $12.71 bln, ending stellar January -Lipper
By Sam Forgione NEW YORK, Jan 31 (Reuters) - Investors poured $12.71 billion into U.S.-based stock mutual funds and exchange-traded funds in the latest week, concluding the strongest four-week flows into stock funds since 1996, data from Thomson Reuters' Lipper service showed on Thursday. Demand for both stock mutual funds and ETFs rose in the week ended Jan. 30. Investors gave $5.78 billion to stock mutual funds, up from $3.66 billion the prior week and showing retail investors' faith in stocks. Stock ETFs attracted $6.93 billion, the most since the first full week of the year, when they pulled in $10.78 billion. Stock mutual funds and ETFs have raked in $34.2 billion in the past four weeks, the best four-week stretch since 1996, Lipper analyst Matthew Lemieux said. "It's a good sign," Lemieux added on the persistent inflows into stock funds. "It reinforces the thought that investors in general have a better sentiment on the market and the economy." Mutual funds and ETFs that hold U.S. stocks gained more money in the latest week than funds that hold foreign stocks. Mutual funds that hold U.S. stocks attracted $2.93 billion, while those that hold foreign stocks attracted $2.85 billion. ETFs that hold U.S. stocks, meanwhile, attracted $5.65 billion in new cash, the most in seven weeks and far exceeding the $1.29 billion inflow into ETFs that hold foreign stocks. The SPDR S&P 500 ETF fund made a comeback with inflows of $4.57 billion, reversing outflows of $4.36 billion the prior week. ETFs are generally believed to represent the investment behavior of institutional investors, while mutual funds are thought to represent the retail investor. Bond funds, meanwhile, still pulled in $3.74 billion in new cash, which was slightly under the $3.9 billion the funds gained the prior week. Bond mutual funds gained $2.93 billion in new money, their weakest turnout in four weeks, while bond ETFs had their best turnout this month with inflows of $812.9 million. The benchmark S&P 500 rose just 0.5 percent over the reporting period. Solid corporate earnings from companies such as Procter & Gamble and Honeywell International and upbeat U.S. unemployment and factory data boosted sentiment. Central banks also issued influential statements over the week. The European Central Bank said banks would repay 137 billion euros from crisis loans, returning more cash earlier than expected and improving sentiment. On the U.S. front, the Federal Reserve kept in place its purchases of $85 billion in Treasuries and agency mortgage securities on Wednesday. Investors continued to favor investment-grade corporate bond funds, to which they gave $1.48 billion, although that sum was down modestly from the prior week's inflows of $2.1 billion. Demand for high-yield "junk" bond funds dwindled as $92.3 million flowed into the funds, down from $511.63 million the prior week. "It's pretty expensive right now if you're looking at high yield, especially if you're feeling comfortable on the equity side," Lemieux of Lipper said. Flexible funds, which can invest in stocks and bonds worldwide, continued to reap high demand with inflows of $1.6 billion, the most so far this year. 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 12.714 0.41 3,118.686 10,129 Domestic Equities 8.579 0.37 2,307.451 7,511 Non-Domestic Equities 4.135 0.52 811.235 2,618 All Taxable Bond Funds 3.742 0.24 1,542.820 4,824 All Money Market Funds 0.900 0.04 2,403.694 1,372 All Municipal Bond Funds 0.574 0.18 325.254 1,347
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