| NEW YORK
NEW YORK Nov 9 Investors pumped a record amount
of money into bond funds worldwide in the latest week as pending
policy changes in the United States and ongoing worries about
Europe weighed on the global economic outlook, data from EPFR
Global showed on F rid ay.
Bond funds attracted $9.97 billion in new cash in the week
ended Nov. 7, a record weekly inflow, according to the
fund-tracking firm. U.S. bond funds accounted for $5.99 billion
of that sum, of which $1.7 billion flowed into U.S. government
bond funds - the most committed in over a year, according to
"The markets have become a touch more risk-averse and the
S&P seems to have lost some of its momentum, so people have gone
more toward the risk-off trade in the U.S.," said Jim Awad,
managing director at Zephyr Management in New York.
The benchmark S&P 500 index fell 1.25 percent over
the reporting period. Disappointing company earnings, renewed
worries about the looming "fiscal cliff" of U.S. tax hikes and
spending cuts and the European Commission's forecast that the
euro zone would barely grow next year dragged on markets.
Demand for benchmark 10-year U.S. Treasuries rose on
Wednesday after the election, with the benchmark yield falling
to 1.6246 percent, its biggest single-day drop since May 30. The
10-year Treasury remained in that territory to yield 1.6233
percent in intraday trading on F rid ay.
Higher-yielding, riskier bond funds found some fans,
however. Roughly $954 million went into high-yield bond funds
and $774 million into emerging market bond funds, but that still
fell short of this year's weekly averages.
Emerging market bond funds have pulled in roughly $1 billion
per week this year, while high-yield bond funds have attracted
about $1.6 billion per week, EPFR Global said.
HUGE INFLOWS IN EMERGING MARKETS
European bond funds attracted $845 million in inflows amid
the European Commission's negative 2013 forecast.
Investors can find higher yields in European debt as the
bonds receive support from the European Central Bank's stimulus
plans, said Zephyr Management's Awad.
Inflows of $2.43 billion to emerging market stock funds and
new demand for funds that hold global stocks accounted for the
net inflow of $1.12 billion to stock funds worldwide.
Investors are still finding opportunity in emerging market
stocks, which some believe have stronger fundamentals than
developed countries' stocks, without the high government debt
"Emerging markets may be closer to turning the corner than
developed markets," said Alan Gayle, senior investment
strategist at RidgeWorth Investments. He said growth in emerging
economies is still more promising than in developed ones.