UPDATE 2-U.S.-based bond mutual funds post outflows of $7.97 bln -ICI
By Sam Forgione NEW YORK, June 26 (Reuters) - Investors in mutual funds based in the United States pulled $7.97 billion out of bond funds in the latest week, marking the first three-week streak of outflows from the funds since August 2011, data from the Investment Company Institute showed on Wednesday. The outflow from bond funds in the week ended June 19 marked an improvement, however, from the prior week's outflows of $13.47 billion, said ICI, a U.S. mutual fund trade organization. Municipal bond funds had outflows of $3.37 billion over the weekly reporting period, the most since January 2011. Taxable bond funds had outflows of $4.6 billion over the period, down from outflows of $10.23 billion the prior week. Stock mutual funds, meanwhile, posted inflows of $1.87 billion over the period. Those inflows marked the first cash gains for the funds after three straight weeks of outflows. Inflows of $2.33 billion into funds that hold non-U.S. stocks accounted for the gains, while funds that hold U.S. stocks suffered outflows of $463 million. The outflows from bond funds and inflows into stock funds came largely ahead of Federal Reserve Chairman Ben Bernanke's comments last Wednesday that the central bank may reduce its $85 billion in monthly bond purchases later this year if the economy is strong enough. Bernanke also said the Fed may end the program in mid-2014. Bernanke's comments triggered a selloff in bond and stock markets. U.S. stocks fell more than 1 percent after the comments, while the yield on the benchmark 10-year U.S. Treasury note rose to a 15-month high of 2.33 percent. Hybrid funds, which can invest in stocks and fixed income securities, attracted $678 million in new cash, down from $1.15 billion in inflows the previous week. The following table is a breakdown of estimated ICI flows for the past five weeks (all figures in millions of dollars): 5/22/13 5/29/13 6/5/2013 6/12/2013 6/19/2013 Total Equity 2,632 -999 -930 -1,032 1,866 Domestic -313 -1,712 -2,520 -2,285 -463 World 2,945 713 1,590 1,253 2,330 Hybrid* 1,299 1,127 347 1,147 678 Total Bond 4,106 1,360 -10,910 -13,468 -7,972 Taxable 3,960 1,576 -8,655 -10,232 -4,604 Municipal 146 -216 -2,256 -3,236 -3,368 Total 8,037 1,488 -11,493 -13,353 -5,428 *Hybrid funds can invest in stocks and/or fixed income securities.