January 7, 2016 / 10:35 PM / in 4 years

U.S. stock funds bleed: see biggest outflows since September - Lipper

NEW YORK (Reuters) - Investors pulled more than $12.2 billion out of U.S. stock funds over the week that ended Jan 6, Lipper data showed on Thursday, slicing their risk as U.S. markets tumbled.

The withdrawals struck both mutual funds and exchange-traded funds during a week that saw concerns about a slowdown in China weigh heavily on U.S. markets. Taxable bond funds saw $2.7 billion in withdrawals during the same period.

Stock funds had their worst week in terms of outflows since September, while international stock funds posted moderate inflows of $157 million. Investors also pulled money out of money market funds.

The withdrawals came as the U.S. stock market - after posting moderate gains in 2015 - started the new year with a four-trading-day drop of 5.2 percent for the Dow Jones Industrial Average .DJI. That was the worst such start for the index since at least 1896, according to financial data provider FactSet Research.

“It’s been a shaky market,” said Lipper research analyst Pat Keon. “The year-end was shaky, and the year started off worse.”

Investors have now pulled money from stock funds for seven of the last nine weeks, Lipper data show, but this was the first weekly period that saw previously bullish ETF investors pull money from equity funds since October.

Taxable-bond funds posted $2.7 billion in outflows during the first week of the year, the fund data service said, as continued inflows to U.S. government debt funds failed to stanch outflows from corporate bonds.

So-called “investment-grade” debt funds, containing bonds from companies with the highest credit ratings, posted $1.1 billion in outflows during the week, their seventh straight week of withdrawals.

Money-market fund investors pulled $16.7 billion from the low-risk investments during the week, according to Lipper.

The 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 -12.044 -0.23 4,935.749 11,929

Domestic Equities -12.201 -0.34 3,481.014 8,486

Non-Domestic Equities 0.157 0.01 1,454.735 3,443

All Taxable Bond Funds -2.671 -0.12 2,156.897 6,108

All Money Market Funds -16.712 -0.72 2,291.054 1,138

All Municipal Bond Funds 0.993 0.28 362.586 1,503

Reporting by Trevor Hunnicutt; Editing by Chris Reese

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