UPDATE 2-U.S.-based stock funds see $7 bln outflow over week-Lipper

Thu May 8, 2014 6:23pm EDT

(Adds table of weekly flows for each asset class, byline)
    By Luciana Lopez
    NEW YORK, May 8 (Reuters) - Investors in U.S.-based funds pulled more than
$7 billion out of stock funds in the week ended May 7, more than the two
previous weeks' worth of net inflows, data from Thomson Reuters' Lipper service
showed on Thursday.
    That was the largest such outflow since early February, turning the
four-week moving average to outflows for the first time since mid-February.
    Investors pulled $8.6 billion out of stock exchange-traded funds while
committing $1.6 billion to stock mutual funds. ETFs are thought to represent the
institutional investor, while mutual funds are commonly purchased by retail
investors.
    "ETF investors were responsible for over $8.6 billion in outflows from
equity ETFs this week, which overwhelmed the $1.6 billion that equity mutual
fund investors added - a very typical figure for them recently," said Jeff
Tjornehoj, head of Lipper Americas Research.
    Tjornehoj said investors have been putting an average of between $1.5
billion and $2 billion per week into equity mutual funds, which is "right in
line with what we've been seeing. For their part, ETFs are about hedge-fund
selling."
    Taxable bond funds attracted roughly $4.7 billion in inflows, marking their
ninth straight week of inflows.
    "Investors saw that interest rates are not going to spike anytime soon and
they don't want to give up their bond funds since a lot of the owners are the
baby boomer generation," Tjornehoj added. "There is nothing about their
generation that wants to give up on income." 
    Low-risk money market funds posted $17.8 billion in net new cash, the
largest such inflows since December. The inflow reversed outflows of $5.5
billion in the previous week, according to Lipper.
    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 ($Bil)  % Assets  Assets ($Bil)   Count
 All Equity Funds         -7.046           -0.17     4,012.657       10,726
 Domestic Equities        -9.154           -0.31     2,960.999       7,822
 Non-Domestic Equities    2.108            0.20      1,051.657       2,904
 All Taxable Bond Funds   4.688            0.27      1,760.975       5,422
 All Money Market Funds   17.766           0.78      2,299.351       1,315
 All Municipal Bond       0.943            0.33      288.158         1,442
 Funds                                                               
        

 (Reporting by Luciana Lopez; Editing by Chris Reese)
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