January 8, 2014 / 10:37 PM / in 4 years

U.S.-based stock funds end year with $6 billion inflow - ICI

NEW YORK, Jan 8 (Reuters) - Investors in U.S.-based mutual
funds poured $6 billion into stock funds in the closing days of
2013 as the U.S. stock market produced a final stretch of record
gains for the year, data from the Investment Company Institute
showed on Wednesday. 
    The inflows into stock funds in the eight-day period ended
Dec. 31 marked the strongest demand for the funds in seven
weeks, according to data from ICI, a U.S. mutual fund trade
    Funds that specialize in U.S. stocks attracted $3.3 billion
of the total inflows, also marking the strongest demand in seven
weeks. Funds that specialize in non-U.S. stocks attracted $2.7
billion, up modestly from the previous week's inflows.
    The Standard & Poor's 500 stock index ended the year
at a record high, notching a yearly rise of 29.6 percent and its
best year since 1997. The Federal Reserve's $85 billion in
monthly bond-buying stimulus kept interest rates low, leading
investors to seek higher income in stocks. 
    Investors poured $167.5 billion into stock funds in 2013,
according to preliminary ICI estimates. That marked the largest
annual inflows into the funds since 2004. Inflows of $143.2
billion into funds that hold non-U.S. stocks trounced inflows of
$24.4 billion into funds that hold U.S. stocks. 
    The MSCI world equity index also posted a
strong 2013, rising 20.2 percent.
    While stock funds attracted inflows over the latest period,
investors pulled about $2.9 billion from bond funds, marking the
14th straight week of withdrawals from the funds. Those outflows
were the smallest in 10 weeks, however. 
    Through the end of the year, the yield on the benchmark
10-year U.S. Treasury rose about 140 basis points from a yearly
low of 1.62 percent on May 2. Investors sold bonds on fears that
a pullback in the Fed's bond-buying would cause bond yields to
spike higher. Bond yields move inversely to their prices.
    Investors pulled $81.1 billion from bond funds in 2013,
preliminary estimates from ICI show. That marked the biggest
annual outflows from the funds in at least three decades,
according to ICI data. 
    Hybrid funds, which can invest in stocks and fixed income
securities, attracted $1.1 billion in the latest period, marking
the biggest inflows into the funds in six weeks. 
    The following table shows estimated ICI flows for the past
five weeks (all figures in millions of dollars):
                       12/4    12/11    12/18    12/23    12/31
 Total Equity         2,055   -1,203      171    2,466    6,003
    Domestic         -1,050   -4,525   -2,814      952    3,315
    World             3,106    3,322    2,985    1,514    2,688
 Hybrid*                957      864      441      827    1,091
 Total Bond          -3,181   -6,874   -8,090   -3,464   -2,851
    Taxable          -1,874   -4,299   -5,568   -2,064     -404
    Municipal        -1,307   -2,575   -2,522   -1,400   -2,447
 Total                 -168   -7,213   -7,477     -172    4,243
 * Hybrid funds can invest in stocks and/or fixed-income

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