UPDATE 1-U.S.-based stock funds post biggest weekly outflow since July '12-Lipper

Thu Aug 22, 2013 5:57pm EDT

By Sam Forgione

NEW YORK Aug 22 (Reuters) - Investors in funds based in the United States pulled roughly $9.4 billion out of stock funds in the latest week, marking the biggest outflow from the funds since July 2012, data from Thomson Reuters' Lipper service showed on Thursday.

A large chunk of the outflows over the week ended Aug. 21 came from the SPDR S&P 500 ETF Trust. Investors withdrew $10.27 billion from the exchange-traded fund, which tracks the performance of the benchmark S&P 500 stock index.

The index plunged 2.53 percent over the weekly reporting period as positive U.S. economic data reinforced fears that the Federal Reserve will soon scale back its $85 billion in monthly bond purchases.

Funds that hold European stocks attracted $1.08 billion in new cash, however, marking the biggest inflow to the funds in 10 weeks. The funds were popular even as the FTSEurofirst 300 index of top European shares fell 2.63 over the week.

Taxable bond funds, meanwhile, had outflows of $3.9 billion over the weekly period as benchmark U.S. Treasury yields hit two-year highs. As yields rise, prices fall.

Both inflation-protected bond funds and riskier high-yield junk bond funds had the biggest outflows in eight weeks over the latest period. Inflation-protected bond funds had outflows of $499 million, while junk bond funds had outflows of $2.3 billion.

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