U.S.-based bond funds post $3.6 bln outflow in latest five days -ICI

Tue Dec 31, 2013 3:24pm EST

NEW YORK, Dec 31 (Reuters) - Investors in U.S.-based mutual
funds pulled $3.6 billion out of bond funds in the five days
ended Dec. 23, data from the Investment Company Institute showed
on Tuesday. 
    The outflows also marked the 13th straight week of
withdrawals from the funds, the data from ICI, a U.S. mutual
fund trade organization, showed. 
    The five-day stretch began Dec. 19, one day after the Fed
decided to cut its bond purchases by $10 billion a month to $75
billion a month at the end of its two-day meeting on Dec. 18. 
    Investors began pulling cash out of bond funds in early June
on fears that a pullback in the Fed's bond-buying program would
cause a spike higher in interest rates, thereby hurting bond
prices, ICI data show. 
    Fed Chairman Ben Bernanke triggered a bond market selloff
and outflows from bond funds when he told Congress on May 22
that the central bank could begin reducing its stimulus if the
U.S. economy looked strong enough.
    Investors also added $254 million into funds that mainly
hold U.S. stocks over the five-day period, the first net inflow
after four weeks of pulling out money. 
    Funds that specialize in stocks of companies outside the
United States, meanwhile, brought in $1.53 billion. The funds
have attracted new cash over every weekly period since the start
of May, ICI data show. 
    The Standard & Poor's 500 stock index rose about 1
percent from the close of Dec. 18 to the close of Dec. 23. 
    The S&P 500's roughly 29 percent rally this year has
resulted in record inflows into stock funds, while a spike in
interest rates after Bernanke signaled in May that the Fed could
start reducing its stimulus has resulted in record outflows from
bond funds.
    U.S.-based stock mutual funds and exchange-traded funds have
attracted $349 billion this year through Dec. 24, a record
according to data from research provider TrimTabs Investment
Research. Investors have pulled a record $73 billion from bond
mutual funds and ETFs, meanwhile, data from TrimTabs showed. 
    Hybrid funds, which can invest in stocks and fixed income
securities, brought in $875 million, according to the ICI data.
    The following data shows estimated ICI flows for the past
five weeks (all figures in millions of dollars):
       
                   11/26/13    12/4    12/11    12/18    12/23
 Total Equity         1,493   1,934   -1,088      430    1,785
    Domestic         -1,431  -1,050   -4,554   -2,700      254
    World             2,925   2,985    3,467    3,130    1,531
 Hybrid                 871     895      877      465      875
 Total Bond          -4,838  -3,606   -6,780   -8,086   -3,589
    Taxable          -3,799  -2,257   -4,205   -5,566   -2,188
    Municipal        -1,039  -1,349   -2,575   -2,520   -1,401
 Total               -2,474    -776   -6,990   -7,192     -930
   
* Hybrid funds can invest in stocks and/or fixed-income
securities.
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