(Corrects return on FTSEurofirst 300 index to 0.84 percent, not
0.54 percent, in 7th paragraph; corrects to benchmark
Treasuries' yield, not prices, fell in 9th paragraph)
By Sam Forgione
NEW YORK Jan 23 Investors in funds based in the
United States poured $4 billion into stock mutual funds in the
week ended Jan. 22 on optimism that stocks would rally further,
data from Thomson Reuters' Lipper service showed on Thursday.
The inflows marked the fifth straight week of new cash into
the funds. Stock exchange-traded funds had their third straight
week of outflows of about $250 million.
Mutual funds are thought to represent the retail investor,
while ETFs are thought to represent the institutional investor.
"Investors believe that there is some upward potential
left," said Tom Roseen, head of research services at Lipper, on
the inflows into stock mutual funds. The benchmark Standard &
Poor's 500 stock index rallied nearly 30 percent last
The inflows came even as the S&P 500 fell a modest 0.2
percent over the holiday-shortened week on some disappointing
European stock funds attracted $1.3 billion in new money,
marking the biggest weekly inflows into the funds since Lipper
records began in 1992. European shares extended their new year
rally over the period and hit 5-1/2-year highs on Jan. 21.
The FTSEurofirst 300 of top European shares rose
0.84 percent for the week. The index hit its highs after a move
by China to inject money into financial markets eased concerns
about a credit crunch that could hamper growth, and on some
strong earnings results.
Investors also poured cash into bond funds. Taxable bond
funds attracted $3.1 billion in new cash, marking their third
straight week of inflows. Funds that mainly hold U.S. Treasuries
attracted $47 million in new cash, marking their first inflows
since last November.
The yield on 10-year U.S. Treasury notes fell a modest 2
basis points to 2.86 percent throughout the week after economic
data on U.S. housing starts in December, industrial output, and
inflation came in as expected.
Funds that hold corporate investment-grade bonds raked in
$1.75 billion, marking the 12th straight week of new cash into
the funds. Inflation-protected bond funds attracted a meager $21
million, still marking the first new demand for the funds since
April of last year.
Low-risk money market funds, which typically invest in
short-term securities, attracted $12.3 billion in new cash after
investors pulled $15.6 billion from the funds the previous week.
Commodities and precious metals funds, which mainly invest
in gold futures, attracted $335 million, marking their first
inflows since last September. The inflows came even as the price
of spot gold slipped about 1 percent on Jan. 21, the most since
the year began.
"People may have seen some buying opportunities after gold
and natural resources took a beating last year," said Roseen.
(Reporting by Sam Forgione; Editing by Chizu Nomiyama)