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Funds saw $104.4 bln outflows in September: Lipper

BOSTON
Fri Oct 17, 2008 6:49pm EDT

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BOSTON (Reuters) - Investors pulled out a record $104.4 billion from U.S. mutual funds in September as they were spooked by the credit crisis and turmoil in financial markets, research firm Lipper Inc said on Friday.

Crisis in Credit

"We have never seen (monthly) outflow figures like this," said Jeff Tjornehoj, senior research analyst at Lipper. The data did not include flows of exchange-traded funds.

The biggest outflows in September were in money-market funds, which lost $56.3 billion, Lipper said. The exodus was triggered by the Reserve Primary Fund, one of the biggest and oldest money-market funds, "breaking the buck".

It was the first time in 14 years that a money-market fund, traditionally considered a safe investment, had "broken the buck."

The fund "broke the buck", or saw the par value of its shares fall below $1 to 97 cents, because the bankruptcy filing of Lehman Brothers Holdings Inc (LEHMQ.PK) forced it to revalue the $785 million of Lehman securities it held as "zero".

Stock and mixed-equity funds saw outflows of $49.5 billion while bond funds saw inflows of $1.4 billion, Lipper said. Lipper is a unit of Thomson Reuters Corp TRIL.L (TRI.TO) .

(Reporting by Muralikumar Anantharaman; editing by Carol Bishopric)
Crisis in Credit


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