UPDATE 1-U.S.-based taxable bond funds return to inflows -Lipper

Thu Jun 26, 2014 5:38pm EDT

(Adds analyst quotes, stock performance, table)
    By Luciana Lopez
    NEW YORK, June 26 (Reuters) - U.S.-based taxable bond funds
returned to inflows in the week ended June 25 after the previous
week's outflows interrupted a nearly four-month streak of net
cash coming in, data from Thomson Reuters' Lipper service showed
on Thursday.
    Taxable bond funds drew $2.34 billion in net inflows for the
week after $920 million in outflows over the previous seven
days.
    In comparison, investors added $1.5 billion to U.S.-based
equity funds, down from $5.3 billion in net inflows over the
previous week. 
    "Investors are enamored with bonds still," said Jeff
Tjornehoj, head of Americas research at Lipper.
    "We saw yields cruise toward four-week lows and investors
responded by dumping" new cash into taxable bond funds.
    The yield on the 10-year U.S. Treasury note 
touched as low as 2.529 percent during the week, its lowest
since early June.
    The S&P 500 gained 0.13 percent over the same time.
    "The equity market is really slow these days," Tjornehoj
said. "We don't see much in the way of volatility."
    Among bond funds, investors added a net $619 million to
corporate high-yield funds after pulling out about $239 million
during the previous week.
    Money market funds posted net inflows of $4.7 billion, their
first week of net new money since early May.
        
 Sector                    Flow Chg  % Assets  Assets      Count
                           ($Bil)              ($Bil)      
 All Equity Funds          1.535     0.04      4,212.550   10,813
 Domestic Equities         2.871     0.09      3,116.746   7,875
 Non-Domestic Equities     -1.336    -0.12     1,095.804   2,938
 All Taxable Bond Funds    2.343     0.13      1,807.667   5,478
 All Money Market Funds    4.691     0.21      2,270.221   1,322
 All Municipal Bond Funds  0.234     0.08      293.399     1,451
 

 (Reporting by Luciana Lopez; Editing by James Dalgleish)
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