U.S.-based stock funds post $1.1 bln outflows in latest week - ICI

Wed May 21, 2014 11:49am EDT

By Sam Forgione
    NEW YORK, May 21 (Reuters) - Investors in U.S.-based mutual
funds pulled about $1.1 billion out of stock funds in the week
ended May 14 after demand for bonds spurred a global
fixed-income rally, data from the Investment Company Institute
showed on Wednesday. 
    The net outflows marked just the third week this year in
which investors have pulled cash out of all stock funds,
according to data from ICI, a U.S. mutual fund trade
organization. Bond funds attracted $4 billion over the week.
    Funds that specialize in U.S. stocks posted $2.3 billion in
outflows, marking the third straight week of withdrawals from
the funds and accounting for the overall net outflows. Funds
that mainly hold non-U.S. stocks attracted $1.2 billion in
inflows. 
    "Taking profits on equities and cycling some of those funds
into Treasuries" likely led to the outflows from stock funds
over the week, said Omer Esiner, chief market analyst at
Commonwealth Foreign Exchange in Washington.
    The S&P 500 and Dow ended at record highs on
May 12 in a broad rally spurred by strong corporate results and
an improving economic outlook. The S&P 500 rose 0.5 percent over
the weekly period.
    The inflows into bond funds were down from the prior week's
$5.5 billion in inflows, which were the most in a year, but
still marked the 14th straight week of inflows. Municipal bond
funds attracted $897 million of the net sum, down modestly from
the prior week but still sizeable.
    Demand for bond funds has recovered this year after record
outflows in 2013 on unexpected strong performance in bonds. U.S.
Treasuries yields fell to six-month lows on May 14 after
expectations that the European Central Bank would cut interest
rates sparked a global fixed-income rally. 
    Hybrid funds, which can invest in stocks and fixed income
securities, attracted $1.1 billion after posting $400 million in
outflows the prior week, which marked their first outflows since
December of last year. 
    The following table shows estimated ICI flows for the past
five weeks (all figures in millions of dollars):
                 4/16/2014     4/23     4/30      5/7      5/14
 Total equity        2,286    3,530   -3,890      762    -1,079
    Domestic           634    1,392   -3,996   -1,879    -2,322
    World            1,652    2,138      106    2,641     1,242
 Hybrid*             1,186    1,239      759     -402     1,145
 Total bond            633    1,984      888    5,548     3,991
    Taxable            604    1,453      559    4,472     3,094
    Municipal           29      531      329    1,076       897
 Total               4,105    6,753   -2,242    5,908     4,057
 *Hybrid funds can invest in stocks and/or fixed income
securities. 
    

 (Reporting by Sam Forgione; Editing by Chizu Nomiyama)
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