World investors turn neutral on U.S. stock funds -EPFR

NEW YORK Fri Feb 8, 2013 12:48pm EST

NEW YORK Feb 8 (Reuters) - Fund investors worldwide turned neutral toward U.S. stocks in the latest week while pulling the most money out of high-yield junk bond funds in 11 weeks, data from EPFR Global showed on Friday.

Funds that hold U.S. stocks had minor outflows of $16 million in the week ended Feb. 6, the fund-tracking firm said, in sharp contrast to the prior week, when the funds pulled in $11 billion.

All stock funds had inflows of $6.56 billion in the latest week, showing that world investors still sought some risk. The appetite for risk in stocks did not apply to bonds, however, as funds that hold riskier high-yield corporate bonds suffered outflows of $1.33 billion. That was the biggest cash loss in 11 weeks, EPFR Global said.

European stock funds had outflows of $264 million, their first cash losses over a weekly period this year. Investors continued to favor emerging markets and poured $3.42 billion into funds that hold those countries' stocks.

Bond funds worldwide pulled in just $1.08 billion in new money over the reporting period. Funds that hold U.S. bonds attracted a slight $472 million in new cash, which was less than a third of the gains they received the prior week.

The benchmark S&P 500 rose 0.7 percent over the period. The momentum of the rally carried over from January, when the index rose 5.1 percent, its best monthly gain since October of 2011.

Over the week, revisions to U.S. jobs data showing that employers added 127,000 more jobs in November and December than previously reported boosted sentiment.

Upbeat data on U.S. factory activity and the U.S. services sector also showed positive strides in the economy, while strong corporate earnings continued to drive investors into stocks.

The benchmark 10-year Treasury fell in price to yield 2.03 percent at the close of trading on Feb. 1 following the upbeat employment and manufacturing data.

The safe-haven bond yield was at 1.97 percent in intraday trading Friday after data showing that the U.S. trade deficit narrowed in December.

Investors showed the same sentiment toward emerging market and European bonds as they did toward the countries' stocks. Emerging market bond funds attracted inflows of $1.27 billion, while investors pulled $804 million out of European bond funds in the latest week.

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.