U.S.-based stock funds attract $2.1 bln, mostly for int'l equities -ICI

Wed Jun 11, 2014 12:56pm EDT

By Sam Forgione
    NEW YORK, June 11 (Reuters) - Investors in U.S.-based mutual
funds poured a net $2.1 billion into stock funds in the week
ended June 4, with all of the inflows going to funds focused on
international stocks over pricier U.S. equities, data from the
Investment Company Institute showed on Wednesday.
    ICI, a U.S. mutual fund trade organization, said funds that
hold stocks of companies outside the United States attracted
$3.2 billion, marking their biggest inflows since early March,
while funds that specialize in U.S. stocks posted $1.1 billion
in outflows. 
    It was the sixth straight week of outflows from funds that
mainly hold U.S. stocks, the longest consecutive outflow streak
since mid-2013. The outflows came despite U.S. and global
equities hitting record highs over the period.
    Money managers have noted investors' reluctance to buy U.S.
stocks at current record highs. International stocks have not
risen as much as U.S. stocks compared with their respective 2007
levels, said Doug Sandler, chief equity officer at RiverFront
Investment Group in Richmond, Virginia. 
    Inflows to bond funds, at $1.2 billion, were the lowest in
five weeks. The yield on benchmark 10-year U.S. Treasury notes
 rose to 2.6 percent over the week, marking its
highest level in three weeks. Yields move inversely to prices. 
    Bond funds continued to attract inflows on their strong
performance this year, said Michael Temple, senior vice
president at Pioneer Investments. The benchmark Barclays U.S.
Aggregate bond index has risen 3.2 percent this year through
Tuesday.
    Hybrid funds, which can invest in stocks and fixed income
securities, attracted $1.1 billion in inflows, marking their
fourth straight week of taking in new money. 
    The following data shows estimated ICI flows for the past
five weeks (all figures in millions of dollars):
                 06/04/14    05/28    05/21    05/14    05/07
 Total equity       2,114   -2,453      692   -1,079      632
    Domestic       -1,132   -2,602   -1,789   -2,321   -2,006
    World           3,246      149    2,480    1,242    2,639
 Hybrid*            1,131    1,108    1,216    1,188     -340
 Total bond         1,156    2,040    2,196    4,037    5,493
    Taxable           371    1,236    1,398    3,141    4,417
    Municipal         785      805      798      897    1,076
 Total              4,401      696    4,103    4,146    5,785
 *Hybrid funds can invest in stocks and/or fixed income
securities.

 (Reporting by Sam Forgione; Editing by Dan Grebler)
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