U.S.-based stock funds attract $2.1 billion, mostly for international equities: ICI

NEW YORK Wed Jun 11, 2014 1:02pm EDT

NEW YORK (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)