January 15, 2016 / 12:12 AM / 3 years ago

Investors pull $9 billion from stock funds during weekly period: Lipper

NEW YORK (Reuters) - Fund investors continued to sour on U.S. stocks and corporate debt during the weekly period that ended Jan 13, Lipper data showed on Thursday, as risk appetite waned in the wake of global market turmoil.

U.S.-based stock mutual funds and exchange-traded funds lost $9.0 billion to withdrawals during a week that saw U.S. stocks continue one of their worst starts to a new year amid fears of a further fall in oil prices.

“We had another rocky week for equities,” said Lipper analyst Jeff Tjornehoj, referencing losses logged by the Dow Jones industrial average, a widely cited market benchmark.

“We had three triple-digit loss days. It’s really hard to build any momentum when that’s your headwind, so naturally mutual-fund investors withdrew money out of equities overall.”

The outflows also included $5 billion pulled from one ETF alone: SPDR S&P 500 ETF, which tracks the largest U.S. stocks. Before last week, ETF investors had been bullish on U.S. stocks, pumping money in for twelve weeks straight.

Considered alone, domestic-stock funds traded in the United States lost $9.9 billion to withdrawals.

Corporate bond funds suffered too. Investment-grade bond funds, widely held by retail investors, extended to eight straight weeks their streak of outflows after posting $740 million in outflows during the week.

The two-month run of outflows now totals $15.4 billion, about 1.8 percent of the assets those funds held when the trend started, Lipper data showed.

High-yield “junk” bond funds posted $2.1 billion in outflows over the period.

Overall, bond funds lost a net $605 million to cash withdrawals, according to the fund data service.

Relatively low-risk money-market funds attracted $10.4 billion during the week, Lipper said. Treasury funds, meanwhile, which hold debt backed by the U.S. government, attracted $1.9 billion, their highest net inflows since October.

Investors disagreed on the prospects for international stocks: mutual-fund investors added money to such funds, while ETF investors trimmed their stakes

European and Japanese stock funds posted outflows during the week, suggesting investors may be growing more skeptical that stimulus by those regions’ central banks means better stock-market returns, after accounting for the rising value of the U.S. dollar.

Despite concerns about energy companies, funds tracking that sector took in $558 million during the week, their best inflows in a month.

Elsewhere, U.S. fund investors added $709 million to precious-metals funds, according to the data.

The funds, seen as maintaining their luster as prices in the economy rise, have been held back by weak inflation pressures in the United States. But their inflows during the weekly period amounted to their best result since January 2015.

“There were some ETF investors who liked what they saw in gold,” said Tjornehoj, who is head of Americas research at Lipper. “There’s always a point in the market where someone wants to be the first to spot the dip.”

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 Pct of Assets($ Count

($ blns) Assets blns)

All Equity -8.966 -0.18 4,678.129 11,919


Domestic -9.904 -0.28 3,277.397 8,478


Non-Domestic 0.938 0.06 1,400.732 3,441


All Taxable -0.605 -0.03 2,139.353 6,110

Bond Funds

All Money 10.421 0.46 2,289.123 1,134

Market Funds

All Municipal 0.995 0.27 363.596 1,503

Bond Funds

Reporting by Trevor Hunnicutt; Editing by Jennifer Ablan and Andrew Hay

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