NEW YORK (Reuters) - Investors in U.S.-based funds pulled more than $7 billion out of stock funds in the week ended May 7, more than the two previous weeks’ worth of net inflows, data from Thomson Reuters’ Lipper service showed on Thursday.
That was the largest such outflow since early February, turning the four-week moving average to outflows for the first time since mid-February.
Investors pulled $8.6 billion out of stock exchange-traded funds while committing $1.6 billion to stock mutual funds. ETFs are thought to represent the institutional investor, while mutual funds are commonly purchased by retail investors.
“ETF investors were responsible for over $8.6 billion in outflows from equity ETFs this week, which overwhelmed the $1.6 billion that equity mutual fund investors added — a very typical figure for them recently,” said Jeff Tjornehoj, head of Lipper Americas Research.
Tjornehoj said investors have been putting an average of between $1.5 billion and $2 billion per week into equity mutual funds, which is “right in line with what we’ve been seeing. For their part, ETFs are about hedge-fund selling.”
Taxable bond funds attracted roughly $4.7 billion in inflows, marking their ninth straight week of inflows.
“Investors saw that interest rates are not going to spike anytime soon and they don’t want to give up their bond funds since a lot of the owners are the baby boomer generation,” Tjornehoj added. “There is nothing about their generation that wants to give up on income.”
Low-risk money market funds posted $17.8 billion in net new cash, the largest such inflows since December. The inflow reversed outflows of $5.5 billion in the previous week, according to Lipper.
The weekly Lipper fund flow data is compiled from reports issued by U.S.-domiciled mutual funds and exchange-traded funds.
Reporting by Luciana Lopez; Editing by Chris Reese