October 15, 2015 / 10:26 PM / 4 years ago

UPDATE 2-Stock, bond funds attract $5.5 bln over weekly period -Lipper

(Adds details, table)
    By Trevor Hunnicutt
    NEW YORK, Oct 15 (Reuters) - Stock and corporate bond funds
pulled in $5.5 billion in new money from investors in the week
that ended Wednesday, according to data from Lipper on Thursday.
    Investors poured $2.5 billion into U.S.-based stock mutual
funds and exchange-traded funds after the category posted $8
billion in outflows the prior week.
    Taxable-bond funds took in $3 billion over the same period,
their second consecutive week of attracting new money, Lipper
    U.S.-based corporate investment-grade bond funds attracted
$1.1 billion in new money over the week ended Wednesday, their
first inflows in five weeks. 
    High-yield bond funds also continued to find favor with
investors, drawing $1.5 billion during the week.
    The inflows suggested that investor appetite for risk
increased on fresh signs the Federal Reserve could delay raising
rates this year because of a weakening U.S. and global economy.
New York Federal Reserve President William Dudley said on
Thursday recent data suggests the U.S. economy is slowing, as
inventories, dollar appreciation and sluggish global growth hold
the U.S. economy back. 
    Greg Peters, who helps manage more than $550 billion in
assets as senior portfolio manager at Prudential Fixed Income,
said on Thursday that junk bonds look interesting, given
widening spreads against low interest rates and the Fed's
slowness in raising short-term interest rates. 
    The yield gap between junk debt and Treasuries is now 6.31
percentage points, compared with about five points at the start
of this year, according to the BofA Merrill Lynch High Yield
    Emerging markets stock funds took in $187 million during the
week, their second straight week of inflows, but funds focused
on the bonds of developing economies posted $164 million in
outflows, their third straight week of outflows.
    Investors weren't uniformly optimistic. 
    Relatively low-risk money market funds took in $7.9 billion
during the week, capping a fourth straight week of inflows
that's seen those funds pull in $41.7 billion.
    Investors in exchange-traded funds also behaved differently
than mutual fund investors.
    Stock ETFs took in $4.7 billion during the last week, while
mutual funds saw $2.2 billion in withdrawals.
    Taxable bond mutual funds took in $483 million, while ETF
investors pumped $2.6 billion into those funds during the week,
Lipper said.
    "The ETF investor this week seemed to be more aggressive,"
said Jeff Tjornehoj, head of Americas research for Lipper.
    Investors in exchange-traded funds are often thought to
represent the institutional investor, including hedge funds.
Mutual funds are thought to represent retail investors.
    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  Assets     Count
                         ($Bil)              ($Bil)     
 All Equity Funds        2.500     0.05      5,031.942  11,938
 Domestic Equities       1.438     0.04      3,602.068  8,541
 Non-Domestic Equities   1.063     0.07      1,429.875  3,397
 All Taxable Bond Funds  3.056     0.13      2,303.771  6,119
 All Money Market Funds  7.895     0.33      2,383.242  1,211
 All Municipal Bond      0.521     0.15      349.757    1,505

 (Reporting by Trevor Hunnicutt; Editing by Steve Orlofsky and
Chris Reese)
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