February 20, 2014 / 11:41 PM / 4 years ago

UPDATE 1-U.S.-based stock funds attract $11 bln over week -Lipper

By Sam Forgione
    NEW YORK, Feb 20 (Reuters) - Investors in U.S.-based funds
poured $11.2 billion into stock funds in the week ended
Wednesday while pulling cash out of safe money market funds,
data from Thomson Reuters' Lipper service showed on Thursday.
    The inflows into stock funds in the week ended Feb. 19
marked the biggest inflows into the funds in eight weeks. Money
market funds, meanwhile, posted over $43 billion in outflows,
marking their biggest outflows since October.
    "Investors are thinking that the worst stretch in the
downturn of U.S. stocks is over," said Tom Roseen, head of
research services at Lipper, referring to a drop in U.S. stocks
in January on a rout in emerging market assets. 
    The inflows into stock funds and outflows from money market
funds, which typically invest in safe, short-term securities and
are viewed as a place to park cash, showed investors' confidence
that stocks could continue to head higher this year.
    Stock exchange-traded funds attracted $8.2 billion of the
net inflows into stock funds, while stock mutual funds attracted
$2.9 billion. 
    ETFs are thought to represent the institutional investor,
while mutual funds are commonly purchased by retail investors. 
    The benchmark Standard & Poor's 500 stock index rose
0.5 percent over the weekly period. Stocks rose during most of
the week after investors blamed weak U.S. retail sales and
homebuilder confidence data on frigid temperatures.
    "People have been shrugging off weak U.S. economic data,"
Roseen said. U.S. markets were closed Monday for Presidents Day.
    The weekly gain in U.S. stocks came despite a downturn in
stock markets on Wednesday after the minutes from a U.S. Federal
Reserve meeting showed members supported continued tapering of
the central bank's bond-buying program.
    Funds that hold emerging market stocks attracted $361
million in new cash, marking their first inflows in six weeks
and underscoring investors' willingness to take greater risk.
    Investors showed some preference for safety by committing
$3.3 billion in new cash to taxable bond funds, marking their
seventh straight week of inflows. 
    Bond investors reacted to the weak U.S. economic data while
stock investors took it in stride, Roseen of Lipper said. 
    Still, investors showed a preference for riskier bonds.
Funds that hold high-yield junk bonds, which hold lower-quality
credit ratings, attracted $804 million in new cash, while funds
that mainly hold U.S. Treasuries posted outflows of $672
    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         11.151     0.29     3,880.696   10,629
 Domestic Equities        7.851      0.27     2,898.076   7,799
 Non-Domestic Equities    3.300      0.34     982.620     2,830
 All Taxable Bond Funds   3.345      0.20     1,691.493   5,323
 All Money Market Funds   -43.106    -1.81    2,337.829   1,319
 All Municipal Bond       0.320      0.12     278.722     1,448
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