By Sam Forgione
NEW YORK, April 11 Investors in U.S.-based funds
committed $1.4 billion to stock funds in the latest week, down
from the prior week even as the S&P 500 and Dow Jones
Industrial Average advanced to record highs, data from
Thomson Reuters' Lipper service showed on Thursday.
The inflows into stock funds in the week ended April 10 were
lower than cash gains of $2.24 billion the previous week,
despite a strong rally in U.S. stocks after the Bank of Japan
unveiled its latest stimulus plan.
"I think that people have generally lost their mad money
appeal for stocks," said Jeff Tjornehoj, head of Americas
research at Lipper.
The decline in stock fund inflows stemmed from investors
putting less money into stock mutual funds. Those funds
attracted $2 billion in new cash, down from $3 billion the prior
Stock exchange-traded funds, meanwhile, suffered outflows of
$602.6 million, a modest improvement from the previous week,
when investors yanked $751.9 million from the funds.
ETFs are generally believed to represent the investment
behavior of institutional investors, while mutual funds are
thought to represent the retail investor.
Funds that only hold U.S. stocks attracted $605.6 million in
new cash, down from $787.5 million the previous week. Inflows of
$794.8 million into mutual funds that hold U.S. stocks offset
outflows of $189.2 million from their ETF counterparts.
The S&P 500 rose 2.2 percent over the reporting period. The
Bank of Japan announced on April 4 that it would inject about
$1.4 trillion into Japan's economy in less than two years to
fight deflation, mainly through purchases of long-term
The move is another instance of a major central bank
propping up global markets through asset purchases, as the U.S.
Federal Reserve has implemented with monthly purchases of $85
billion in Treasuries and agency mortgage securities.
The Bank of Japan's stimulus plan jumpstarted a rally in
U.S. stocks that persisted despite negative U.S. unemployment
data showing a rise in claims for unemployment benefits and a
slowdown in hiring last month.
Investors poured $2.1 billion into taxable bond ETFs over
the reporting period, the most since May of last year. ETFs that
hold investment-grade bonds pulled in $922.61 million in new
cash, while flexible ETFs that hold a wide range of securities
attracted $793.5 million in new cash.
ETFs that hold Treasuries also gained roughly $396 million
in new cash. The iShares: Floating Rate Note Fund,
which invests in bonds whose interest rates change regularly
gained the most among bond ETFs with inflows of $505.3 million.
Mutual funds that hold taxable bonds attracted $1.9 billion
in new cash over the week, down slightly from about $2 billion
the prior week. The inflows into taxable bond ETFs and mutual
funds amounted to roughly $4 billion in cash into the funds
overall, up from $2.45 billion the prior week.
"Domestic investors may have been trying to get the jump on
an anticipated influx of Japanese investors," Tjornehoj of
Lipper said on the inflows into bond funds.
Tjornehoj was referring to how the Bank of Japan's monetary
stimulus has increased appetite for higher yields in U.S. and
euro zone bonds as a result of sharp declines in Japanese
government bond yields.
Funds that hold high-yield "junk" bond funds suffered minor
outflows of $78.63 million over the week, which marked the first
outflows from the funds in four weeks.
Money market funds, which are low-risk vehicles that invest
in short-term securities, suffered outflows of $8.6 billion over
the week after pulling in $1.21 billion in new cash the previous
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 1.404 0.04 3,259.714 10,204
Domestic Equities 0.606 0.03 2,431.667 7,553
Non-Domestic Equities 0.799 0.10 828.047 2,651
All Taxable Bond Funds 3.999 0.25 1,596.018 4,911
All Money Market Funds -8.566 -0.37 2,337.646 1,361
All Municipal Bond Funds -0.631 -0.19 327.368 1,377