U.S.-based domestic stock funds have second week of outflows - ICI

Wed Dec 11, 2013 4:01pm EST

By Sam Forgione
    NEW YORK, Dec 11 (Reuters) - Investors in U.S.-based mutual
funds pulled more than $1 billion from funds that mainly hold
U.S. stocks in the latest reporting period on fears of a
potential pullback in the Federal Reserve's bond-buying program,
data from the Investment Company Institute showed on Wednesday.
    The outflows of $1.05 billion from funds that hold U.S.
stocks over the eight-day period ended Dec. 4 marked the second
straight period of investor withdrawals from the funds, the data
from ICI, a U.S. mutual fund trade organization, showed. 
    Meanwhile, funds that mainly hold stocks of companies
outside the United States attracted nearly $3 billion in new
cash, marking 31 straight weeks of inflows into the funds. 
    The demand for funds that hold non-U.S. stocks offset the
outflows from funds holding U.S. stocks and led to net inflows
of more than $1.9 billion into stock funds overall. 
    The Standard & Poor's 500 stock index fell 0.6
percent over the reporting period on conflicting data on the
strength of the U.S. economy. The data has fueled uncertainty
over when the Federal Reserve would scale back its $85 billion
in monthly bond-buying.
    Investors pulled $4.4 billion out of bond funds, down
slightly from the prior week's outflows and marking the 10th
straight week of withdrawals from the funds. Funds that hold
municipal bonds had outflows of about $1.4 billion, marking the
largest outflows in seven weeks.
    Bond prices fell over the reporting period on the worries
that the Fed could reduce its bond-buying, which analysts have
said will lead to a spike higher in interest rates. The Fed next
meets on Dec. 17-18.
    The benchmark 10-year U.S. Treasury yield rose to 2.85
percent at one point last Wednesday, marking its highest level
since mid-September after a strong U.S. private-sector jobs
report. Bond yields move inversely to their prices.
    Hybrid funds, which can invest in stocks and fixed income
securities, attracted $894 million in new cash, up slightly from
the previous week and marking their ninth straight week of
inflows. 
    The following table shows estimated ICI flows for the past
five weeks (all figures in millions of dollars):
                 11/6/13     11/13     11/20     11/26     12/4
 Total Equity      8,576     7,235     5,589     1,494    1,937
    Domestic       4,934     3,952     1,116    -1,431   -1,048
    World          3,642     3,283     4,473     2,925    2,985
 Hybrid*           1,396     1,477     1,538       870      894
 Total Bond       -3,431    -7,496    -3,269    -4,838   -4,419
    Taxable       -2,599    -6,362    -2,174    -3,799   -3,068
    Municipal       -833    -1,134    -1,094    -1,039   -1,351
 Total             6,541     1,216     3,858    -2,475   -1,587
 *Hybrid funds can invest in stocks and/ or fixed income
securities.
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