June 16, 2016 / 11:55 PM / 3 years ago

UPDATE 1-U.S. taxable bond funds record largest 2016 withdrawals -Lipper

(Adds details on mutual funds and ETFs, table, byline)
    By Trevor Hunnicutt
    NEW YORK, June 16 (Reuters) - Investors pulled $3.1 billion
from U.S.-based taxable bond funds in the week that ended June
15, Lipper data showed on Thursday, delivering funds that have
been popular this year their largest withdrawals since December.
    The result came as high-yield bond funds ended a two-week
period of inflows and posted $1.8 billion in outflows over the
week, the data showed. Emerging-market debt and Treasury funds
recorded more modest outflows of $107 million and $167 million.
    Both mutual funds and exchange-traded funds suffered bond
outflows, the data showed, as worries persist that Britain may
leave the European Union after a June 23 referendum, also known
as "Brexit." 
    "I don't think it's going to cross the pond that
dramatically, but investors can be positioning away from riskier
assets with this event that has a special date on the calendar,"
said Todd Rosenbluth, director of exchange-traded and mutual
fund research at S&P Global Market Intelligence.
    The high-yield market typically moves in sympathy with
equities, which saw the Standard & Poor's 500 come under severe
selling pressure in the last five days ended Wednesday. 
    By contrast, corporate investment-grade funds - from
higher-credit issuers - attracted their 15th straight week of
inflows, $499 million.
    Stock funds also sank, with investors pulling $3.4 billion
from those listed in the United States, the data showed, adding
to a selloff of the funds that has lasted most of this year.
    Those came as healthcare and biotechnology sector funds
posted $531 million in outflows, their first withdrawals in a
month, as some prominent drugs failed in trials and troubled
Canadian drugmaker Valeant Pharmaceuticals International Inc
 continued to weigh on the sector. 
    Financial-sector funds, now less likely to get a U.S.
Federal Reserve rate hike that could boost banks' net interest
margins, posted $363 million in outflows. 
    Non-domestic-focused stock funds posted $2 billion in
withdrawals after taking in $1 billion the week before. Both
developed and emerging markets funds fell out of favor.
    European stocks funds - perhaps most directly affected by a
Brexit vote - posted $248 million. The funds have now recorded
negative results in 19 of the last 20 weeks.
    Investors withdrew $13.6 billion from relatively low-risk
money-market funds, while precious metals funds took in $900
million and their seventh straight week of inflows, the fund
research service said.
    The following is a broad breakdown of the flows for the
week, including ETFs (in $ billions):
 Sector                    Flow Chg  % Assets  Assets     Count
                           ($Bil)              ($Bil)     
 All Equity Funds          -3.364    -0.06     5,086.236  12,084
 Domestic Equities         -1.359    -0.04     3,627.997  8,586
 Non-Domestic Equities     -2.005    -0.13     1,458.239  3,498
 All Taxable Bond Funds    -3.112    -0.14     2,247.499  6,073
 All Money Market Funds    -13.570   -0.57     2,347.483  1,115
 All Municipal Bond Funds  0.904     0.24      381.286    1,412
 (Reporting by Trevor Hunnicutt; Editing by Jennifer Ablan and
Diane Craft)
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