UPDATE 1-U.S.-based taxable bond funds attract $4.6 bln -Lipper

Thu Jan 9, 2014 6:05pm EST

By Sam Forgione

NEW YORK Jan 9 (Reuters) - Investors in U.S.-based funds poured $4.6 billion into taxable bond funds in the latest week and limited their commitments to stock funds, taking profits after stellar stock market gains in 2013, data from Thomson Reuters' Lipper service showed on Thursday.

The flows into bond funds in the week ended Jan. 8 marked the biggest weekly inflow since last May. The preference for bonds showed investors' reduced appetite for stocks after last year's major rally.

Funds that hold emerging market debt attracted $146 million in new cash, marking the first net inflow to the funds since August, while funds that hold high-yield junk bonds attracted $642 million, reversing the prior week's outflows.

"Investors are skeptical that the momentum in the U.S. stock market we had in 2013 will flow into the new year," Jeff Tjornehoj, head of Americas research at Lipper, said of the preference for bonds.

Stock funds attracted $1.9 billion in new cash, with emerging market stock funds taking in $337 million of that sum. Funds that mainly hold U.S. stocks had outflows of $613 million, however, marking their first withdrawals in three weeks.

The Standard & Poor's 500 stock index fell 0.5 percent over the weekly period, marking a cautious start to the year as some investors took profits after the index rallied 29.6 percent in 2013.

Investors also pulled $6.8 billion from money market funds, marking the first outflow in three weeks. The funds, which are low-risk vehicles that invest in short-term securities, are viewed as a safe place to park cash.

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.