March 19, 2010 / 12:23 AM / 7 years ago

UPDATE 2-Record weekly outflow from money market funds-EPFR

(Updates with data, adds byline)

By Daniel Bases

NEW YORK, March 18 (Reuters) - Investors pulled a record $61.1 billion from money market mutual funds in the week ended March 17, according to fund tracker EPFR Global.

The firm said on Thursday the net outflow of cash from these funds, which are typically viewed as places where investors can stash money for safe-keeping, is more than $256 billion year-to-date.

"Overall, EPFR Global-tracked equity funds took in a net $5.7 billion while collective flows into bond funds again exceeded $6 billion," the statement said.

In addition to the EPFR Data, the Investment Company Institute, a trade group, earlier reported its own money market mutual fund flow data, showing a decrease of $73.71 billion, to $3.017 trillion for the week ended March 17.

ICI's data includes both retail and institutional money market mutual funds. [ID:nWALIEE649]

REGIONAL EQUITIES

European equity funds, for a fifth week in a row, stood out as the only big developed equity market fund group to suffer outflows. In the latest week investors redeemed $1.06 billion.

This group had its biggest weekly outflow since the second quarter of 2009 "as calls for fiscal discipline to blunt the impact of Greece's fiscal problems fueled fears of stagnant growth or, in the worst case, a double-digit recession for the Eurozone," Cambridge, Mass.-based EPFR wrote.

Japan-focused equity funds took in $176.5 million in net new cash while U.S. equity funds had net inflows of $3.54 billion. Year-to-date however U.S. equity funds have had a net outflow of $11.9 billion.

Japan equity funds have inflows year-to-date of $2.2 billion with 12 straight weeks of fresh cash being added "as investors respond to a strengthening of the export cycle and the Bank of Japan's commitment to keep monetary policy loose in order to combat inflation".

Asia ex-Japan equity funds led emerging markets, taking in $730 million in the latest week.

In EMEA (Europe, Middle East, and Africa), Russia-focused equity funds had inflows of $253 million, benefiting from oil prices holding above $80 a barrel.

Dedicated long-only emerging market equity funds increased their net inflows for a third week, taking in $1.75 billion.

Africa regional funds took in fresh cash for a 28th consecutive week while Turkey-focused equity funds had outflows for a seventh week in a row "against a backdrop of rising inflation, political tensions and the government's decision not to seek a new IMF deal," EPFR wrote.

Among the sector funds, net new cash flowed into financial, energy, real estate and technology.

Financial-focused equity funds took in a net $516 million, a 12-week high. Real estate sector funds took in $246 million, benefiting from the low interest rate environment in the United States.

Defensive sectors such as consumer goods, healthcare/biotechnology and utilities had outflows.

Mexico benefited from optimism about the U.S. economy, taking in a net $149 million, while China equity funds had outflows for the ninth week out of the last 11, losing a net $7.9 million to redemptions. Fresh cash did find its way into Hong Kong ($229 million), India ($101.3 million), and Korea ($89.6 million) equity funds.

BOND FUNDS

High-yield bond funds, having set a record inflow the prior week, took in another $954 million. Emerging market bond funds took in a total of $587 million.

U.S. bond funds had inflows for a 63rd consecutive week, bringing in $2.6 billion. (Editing by Jan Dahinten)

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