Retail investors add money to U.S.-based stock funds -Lipper

Thu Jan 16, 2014 6:14pm EST

NEW YORK, Jan 16 (Reuters) - Retail investors poured money
into U.S.-based stock funds for a fourth straight week, but
institutional investors shied away from those assets, adding to
outflows in the previous week, data from Thomson Reuters' Lipper
service showed on Thursday.
    Stock mutual funds attracted $5.06 billion in net new cash
for the week ended Jan. 15, the largest such inflows since the
end of last year.
    In contrast, stock exchange-traded funds saw net outflows of
$1.4 billion, a sharp pickup after such funds saw a modest $2.5
million exit in the previous period.
    Mutual funds are often considered to represent the behavior
of retail investors, with ETFs considered more representative of
institutional investors.
    Institutional investors may have thought stocks were
overbought or they wanted to avoid risks, such as no trading on
the upcoming U.S. market holiday on Monday, Jan. 20, said Tom
Roseen, head of research services for Lipper, a Thomson Reuters
company.
    "They basically bailed on domestic equities," he said.
    The Standard & Poor's 500 stock index rose 0.6
percent from the close of Jan. 8 through the close of Jan. 15.
    But with the index rallying almost 30 percent last year,
many investors wonder whether the advance in stocks has much
more room to run - especially as the U.S. Federal Reserve pulls
back in coming months from its $85 billion-per-month asset
buying program.
    That flood of money from the Fed last year helped buoy
riskier assets. But stocks could struggle this year without such
support.
    Municipal bond funds notched net inflows for the first time
since the week ended May 22, with $57 million into mutual funds
and $46 million into ETFs.
    Investors last year faced a number of high-profile financial
struggles in Puerto Rico, Illinois and Detroit that spooked
municipal markets, Roseen noted.
    "But if you take a look overall, there have been returns
more handsome than Treasury yields," he said. 
    Funds that hold investment-grade corporate bonds gained a
net $1.6 billion, while high-yield corporate bond funds - viewed
as riskier - gained a more modest $65 million. 
    Money market funds also saw net outflows for a second
straight week, with $15.6 billion exiting. The funds, which are
low-risk vehicles that invest in short-term securities, are
viewed as a safe place to park cash.
    The weekly Lipper fund flow data is compiled from reports
issued by U.S.-domiciled mutual funds and exchange-traded funds.
    The following is a broad breakdown of the flows for the
week, including exchange-traded funds (in $ billions): 
    
    
 Sector                  Flow Chg  Pct       Assets      Count
                         ($ bln)   Assets    ($ bln)     
 All Equity Funds        3.644     0.09      3,917.925   10,566
 Domestic Equities       1.015     0.03      2,924.740   7,775
 Non-Domestic Equities   2.629     0.27        993.186   2,791
 All Taxable Bond Funds  2.146     0.13      1,669.656   5,303
 All Money Market Funds  -15.564   -0.65     2,381.528   1,330
 All Municipal Bond      0.103     0.04        273.945   1,410
 Funds
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.