U.S.-based stock funds post biggest outflows in a year: ICI

NEW YORK Wed May 7, 2014 2:52pm EDT

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NEW YORK (Reuters) - Investors in U.S.-based mutual funds pulled $3.9 billion out of stock funds in the week ended April 30 after ongoing tensions in Ukraine and weak U.S. economic growth, data from the Investment Company Institute showed on Wednesday.

The outflows from stock funds were the biggest since investors pulled $4.9 billion out of the funds roughly a year earlier over the week ended May 1, 2013, according to data from ICI, a U.S. mutual fund trade organization. Bond funds attracted $931 million in inflows over the latest week.

The outflows from stock funds marked the first withdrawals in six weeks. Outflows of roughly $4 billion from funds that specialize in U.S. stocks accounted for the net outflows, while funds that mainly hold non-U.S. stocks attracted a meager $104 million in inflows.

The outflows from stock funds led to net outflows of $2.2 billion across all U.S.-based stock, bond, and hybrid mutual funds tracked by ICI, marking the first net outflows from the funds since last December, data from ICI showed.

"We've certainly seen some economic data that could have spooked some investors, especially the GDP number," said Tim Ghriskey, who helps oversee $1.5 billion as chief investment officer of Solaris Group in Bedford Hills, New York.

The Commerce Department said on April 30 that U.S. gross domestic product expanded at a 0.1 percent annual rate, the slowest since the fourth quarter of 2012.

The period covered by the ICI data included a day, April 25, when U.S. and European stock markets fell on concern that tensions between Ukraine and Russia may depress economic activity in Europe. However, the benchmark S&P 500's gained 0.5 percent over the weekly period and the Dow closed at its first record high of 2014.

Strong corporate earnings from companies such as Apple and Facebook boosted U.S. stocks over the week.

The latest inflows into bond funds, while less than half the prior week's inflows of about $2 billion, marked the 12th straight week of new demand for the funds. Demand for the funds has recovered after record annual outflows last year.

Hybrid funds, which can invest in stocks and fixed income securities, attracted $767 million in new cash, marking their lowest demand in four weeks.

The following data shows estimated ICI flows for the past five weeks (all figures in millions of dollars):

4/2/2014 4/9 4/16 4/23 4/30

Total equity 3,155 5,752 2,283 3,527 -3,858

Domestic 938 2,073 633 1,390 -3,963

World 2,217 3,680 1,650 2,137 104

Hybrid* 265 1,482 1,186 1,229 767

Total bond 3,379 1,609 633 1,987 931

Taxable 3,129 1,448 604 1,456 602

Municipal 250 161 29 531 329

Total 6,799 8,843 4,102 6,743 -2,160

*Hybrid funds can invest in stocks and/or fixed income securities.

(Reporting by Sam Forgione; Editing by Nick Zieminski)

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