U.S.-based bond funds see first inflows since Sept-ICI

Wed Jan 15, 2014 4:06pm EST

NEW YORK, Jan 15 (Reuters) - Investors in U.S.-based mutual
funds added $2.65 billion into bond funds at the start of the
year after 14 straight weeks of outflows, data from the
Investment Company Institute showed on Wednesday. 
    Taxable bond funds particularly gained in the eight-day
period ending Jan. 8, posting their first net advance since
early October. 
    But investors pulled money out of municipal bond funds, a
33rd straight week of net outflows, according to data from ICI,
a U.S. mutual fund trade organization.
    Investors were also wary of funds that mainly hold U.S.
stocks over the period, pulling out a net $3.36 billion. 
    U.S. stocks kicked off the year with a whimper, with the
Standard & Poor's 500 down 0.6 percent from the close of
last year through the close of Jan. 8, in what some market
participants worry could be a sign of a lackluster year to come.
   
    While stimulus from the U.S. Federal Reserve helped push
U.S. stocks to a gain of nearly 30 percent last year, the Fed in
December said it would start slowing its massive bond-buying
program as the economy grows strong enough to stand on its own. 
  
    Funds that specialize in stocks of companies outside the
United States fared better in the most recent period, pulling in
$2.72 billion.
    Hybrid funds, which can invest in stocks and fixed income
securities, attracted $880 million in the latest period, down
slightly from the previous week's inflows. 
    The following table shows estimated ICI flows for the past
five periods (all figures in millions of dollars):
    
                  12/11    12/18    12/23   12/31     1/8
 Total Equity    -1,203      171    2,466   6,198    -647
    Domestic     -4,525   -2,814      952   3,499  -3,362
    World         3,322    2,985    1,514   2,699   2,716
 Hybrid             864      441      827   1,082     880
 Total Bond      -6,874   -8,090   -3,464  -2,812   2,647
    Taxable      -4,299   -5,568   -2,064    -440   2,994
    Municipal    -2,575   -2,522   -1,400  -2,372    -347
 Total           -7,213   -7,477     -172   4,467   2,881
 
* Hybrid funds can invest in stocks and/or fixed-income
securities.
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