By Sam Forgione
NEW YORK, Jan 7 Investors in U.S.-based funds
poured $4.13 billion into stock mutual funds, the fifth straight
week of commitments from retail investors as zeal for stocks
pushed into February, data from Thomson Reuters' Lipper service
showed on Thursday.
The latest gains for the week ended Feb. 6 mark the
strongest five-week run into stock mutual funds since April of
2000. The funds have pulled in $24.9 billion over that period.
"The party continued," said Tom Roseen, head of research
services at Lipper.
Stock exchange-traded funds reaped inflows of $1.95 billion,
down from the prior week's gains of $6.9 billion. Stock mutual
funds and ETFs combined pulled in $6.08 billion in the latest
week, roughly half the previous week's $12.7 billion in gains
but still showing high demand.
Investors turned cold on the SPDR S&P 500 ETF fund,
and pulled $3 billion from it after rushing $4.57 billion into
the fund the prior week.
Investors favored funds that hold non-U.S. stocks in the
latest week, as $4.33 billion went into mutual funds and ETFs
that target foreign companies.
Mutual funds that hold emerging market stocks were
particular winners with gains of $1.76 billion. Mutual funds and
ETFs that hold U.S. stocks, meanwhile, fell behind their
non-U.S. counterparts with inflows of $1.75 billion.
ETFs are generally believed to represent the investment
behavior of institutional investors, while mutual funds are
thought to represent the retail investor.
BOND MUTUAL FUNDS IN FAVOUR
The benchmark S&P 500 rose 0.7 percent over the
period. The momentum of the rally carried over from January,
when the index rose 5.1 percent, its best monthly gain since
October of 2011.
Over the week, revisions to U.S. jobs data showing that
employers added 127,000 more jobs in November and December than
previously reported boosted sentiment.
Upbeat data on U.S. factory activity and the U.S. services
sector also showed positive strides in the economy, while strong
corporate earnings continued to drive investors into stocks.
Bond funds including ETFs, meanwhile, pulled in $2.27
billion over the weekly period.
Retail investors dished out $3.3 billion to bond mutual
funds, up modestly from the prior week's gains of $2.9 billion.
"Investors are not tiring at all of the bond market," Roseen
of Lipper said on the new retail money into the funds.
But institutional investors made the opposite bet on bonds
and pulled $1.03 billion from bond ETFs.
Bond enthusiasts continued to heap cash into
investment-grade corporate bond funds, to which they gave $1.61
billion, up slightly from $1.48 billion the prior week.
High-yield "junk" bond funds, however, saw a sharp drop in
demand as investors pulled $1.38 billion out of the funds. That
marks the biggest investor outflows since June of last year.
Roseen of Lipper said that investors in riskier high-yield
securities might have withdrawn after stock market losses on
Feb. 4, when new concerns arose over the euro zone debt crisis.
Flexible funds, which can invest in stocks and bonds of any
origin, continued to attract strong demand with inflows of
roughly $2.21 billion. That is the biggest gain for the funds
since March of 2011.
The weekly Lipper fund flow data is compiled from reports
issued by U.S.-domiciled mutual funds and exchange-traded funds.
The following is a broad breakdown of the flows for the
week, including exchange-traded funds (in $ billions):
Sector Flow Chg % Assets Count
($Bil) Assets ($Bil)
All Equity Funds 6.085 0.20 3,140.165 10,130
Domestic Equities 1.753 0.08 2,328.265 7,512
Non-Domestic Equities 4.331 0.53 811.901 2,618
All Taxable Bond Funds 2.266 0.15 1,545.563 4,838
All Money Market Funds -4.857 -0.20 2,398.707 1,371
All Municipal Bond Funds 0.109 0.03 326.071 1,352