August 14, 2014 / 10:20 PM / in 3 years

UPDATE 1-U.S.-based high-yield bond funds attract $680 mln, first inflows in 5 weeks

(Adds additional flows, analyst comments, table)
    By Sam Forgione
    NEW YORK, Aug 14 (Reuters) - Investors in U.S.-based funds
committed $680 million in new cash to high-yield junk bond funds
in the week ended Aug. 13 on reduced concerns of both excessive
prices on the debt and an early Federal Reserve rate hike, data
from Thomson Reuters' Lipper service showed on Thursday. 
    The inflows were the first in five weeks and came after
investors pulled a record $7.1 billion out of the funds the
prior week. Taxable bond funds overall attracted $3.8 billion
after posting $4.8 billion in outflows the prior week. 
    "Much weaker data than expected around the globe added to
the belief that none of the major central banks were going to
withdraw stimulus," said Kim Rupert, managing director at Action
Economics in San Francisco. She said investors moved back into
high yield after recognizing the bonds as having been oversold.
    One closely watched data point was Wednesday's U.S. retail
sales figures, which showed a lack of growth in July from June.
Economists polled by Reuters had projected a 0.2 percent
increase. 
    Funds that hold floating-rate loans posted $687.1 million in
outflows, marking their fifth straight week of withdrawals. The
loans also offer higher yields, and funds that hold them
typically attract cash alongside high-yield bond funds. 
    Emerging markets bond funds, meanwhile, attracted about $72
million in new cash after posting $761 million in withdrawals
the prior week. 
    Stock funds attracted $1.3 billion in inflows after posting
massive $16.4 billion withdrawals the prior week, which were the
biggest outflows since February. 
    While stock exchange-traded funds attracted $1.4 billion in
new cash, stock mutual funds posted $162 million in withdrawals.
That marked their third straight week of outflows. 
    The reduced concerns of an earlier-than-expected rate hike
from the Fed also helped inflows into stock funds recover, said
Patrick Keon, research analyst at Lipper.
    Funds that specialize in Japanese stocks, meanwhile, posted
about $106 million in outflows, marking their first outflows in
five weeks. 
    Investors still expressed some caution by committing $9.3
billion to low-risk money market funds, which are viewed as a
place to park cash. That marked their second straight week of
inflows. 
    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    Pct      Assets       Count
                      ($ blns)   Assets   ($ blns)      
 All Equity Funds     1.250      0.03    4,161.076      10,891
 Domestic Equities    0.970      0.03    3,071.591      7,932
 Non-Domestic         0.280      0.03    1,089.485      2,959
 Equities                                               
 All Taxable Bond     3.759      0.21    1,814.779      5,537
 Funds                                                  
 All Money Market     9.300      0.41    2,288.307      1,309
 Funds                                                  
 All Municipal Bond   0.648      0.22    296.090        1,428
 Funds                                                  
 
 (Reporting by Sam Forgione; Editing by Lisa Shumaker)
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