NEW YORK Fund investors worldwide pulled $7 billion out of stock funds in the week ended May 21 on weak U.S. economic data and disappointing corporate results, data from a Bank of America Merrill Lynch Global Research report showed on Friday.
The outflows from stock funds, which include both mutual funds and exchange-traded funds, reversed the prior week's inflows of $11 billion. Funds that specialize in U.S. stocks posted $10.9 billion in outflows, according to the report, which also cited data from fund tracker EPFR Global.
Both the net outflows from all stock funds and the outflows from U.S.-focused stock funds were the biggest in just two weeks. Funds that specialize in long-term U.S. Treasuries attracted record inflows of $3.1 billion, meanwhile, according to EPFR Global data.
The outflows came as the S&P 500 edged 0.03 percent lower over the period after hitting record highs during the prior week. Weak U.S. economic data on industrial output and consumer sentiment and disappointing earnings from companies like retailer TJX Companies weighed on stock indexes.
Emerging markets stock funds attracted $1 billion in new cash, marking their second straight week of inflows. Analysts have said the Federal Reserve's periodic cuts to its monthly bond-buying program have proceeded smoothly, which has reassured emerging market stock investors.
All bond funds attracted $5.9 billion in net inflows over the weekly period, marking their 11th straight week of new demand. The record inflows into funds that specialize in long-term Treasuries, which include U.S. government bonds with a duration of six years or longer, were the biggest since EPFR Global began tracking the funds in 2004.
The inflows showed investors capitalizing on gains in Treasuries prices. Benchmark 10-year U.S. Treasury note yields hit 2.47 percent on May 15, the lowest level since October 30.
All government debt funds, including funds that hold U.S. Treasuries and other government bonds, attracted $2.6 billion in inflows, with the iShares Barclays 7-10 Year Treasury Bond ETF and the ProShares Ultra 7-10 Year Treasury ETF attracting much of the inflows, according to the Bank of America report.
Aside from big inflows into funds that hold safe-haven U.S. Treasuries, investors committed cash to riskier bond funds. High-yield bond funds attracted $700 million in inflows, marking their 15th straight week of new money, while emerging market bond funds attracted $500 million in their 8th straight week of inflows.
Analysts have said that unexpected outperformance in bonds this year has led investors to seek bond funds. The Barclays U.S. Aggregate bond index has risen 3.4 percent this year through Thursday.
Investors also parked $10 billion in low-risk money market funds over the weekly period, however, reversing $4.9 billion in outflows over the prior week.
(Reporting by Sam Forgione; Editing by Chizu Nomiyama and Meredith Mazzilli)