Outflows from U.S. bond funds accelerate in latest week - ICI
By Sam Forgione NEW YORK, Aug 21 (Reuters) - Investors in mutual funds based in the United States pulled $3.9 billion out of bond funds in the latest week, the third straight week of outflows from such funds, data from the Investment Company Institute showed on Wednesday. The outflows in the week ended Aug. 14 accelerated from the prior week, when investors withdrew $2.09 billion from the funds. Investors have withdrawn nearly $13 billion from bond funds over the last three weeks, according to ICI, a U.S. mutual fund trade organization. Interest rates rose during the latest week on worries that the U.S. Federal Reserve will begin winding down its economic stimulus program, which would send bond yields higher. The Fed is buying $85 billion in bonds monthly in an effort to spur hiring and keep interest rates low. The stimulus has been a major source of support for both bond and stock markets. The yield on the benchmark 10-year U.S. Treasury note rose 11 basis points to 2.71 percent in the week to Aug. 14. As yields rise, prices fall. Stock funds had inflows totaling $1.49 billion in the latest week, down from inflows of $3.41 billion in the prior week. Funds that hold only U.S. stocks had outflows of $764 million, reversing modest inflows of $357 million in the previous week. Funds that hold stocks of companies outside the United States had inflows of $2.26 billion, their 15th straight week of inflows. The benchmark S&P 500 stock index fell 0.33 percent in the latest week on concerns surrounding the Fed's stimulus plans. Hybrid funds, which can invest in stocks and fixed income securities, attracted $1.55 billion in new cash from investors in the latest week, up modestly from inflows of $1.33 billion in the previous week and extending the funds' inflow streak to seven sraight weeks. The following table shows estimated ICI flows for the past five weeks (all figures in millions of dollars): 7/17/13 7/24/13 7/31/2013 8/7/2013 8/14/2013 Total Equity 3,653 4,209 711 3,409 1,494 Domestic 2,270 2,729 -930 357 -764 World 1,382 1,481 1,641 3,053 2,259 Hybrid* 3,191 2,056 1,739 1,329 1,549 Total Bond -3,251 2,159 -6,971 -2,090 -3,922 Taxable -797 4,170 -4,097 35 -1,836 Municipal -2,455 -2,011 -2,873 -2,126 -2,086 Total 3,592 8,425 -4,521 2,648 -879 *Hybrid funds can invest in stocks and/or fixed income securities.