February 11, 2016 / 11:07 PM / 3 years ago

Investors flee health, bank and tech funds in search of safety: Lipper

NEW YORK (Reuters) - Investors pulled money from U.S.-based stock funds again during the most recent week, piling into Treasuries, gold and other safe-haven assets as global market performance continued to falter.

A trader works, as a screen shows the Dow Jones Industrial Average after the closing bell, on the floor of the New York Stock Exchange (NYSE) February 11, 2016. REUTERS/Brendan McDermid

The stock funds posted $1.5 billion in withdrawals during the week that ended Feb. 10, Lipper data showed on Thursday, as money fled the risk assets for the sixth straight week.

Stock indexes worldwide fell further on Thursday on fears over the health of the global economy, with MSCI’s all-country world equity index closing the day more than 20 percent below its record high last May, confirming global stocks are in a bear market.

“It was kind of a wipeout,” Lipper analyst Tom Roseen. “This wasn’t a good week.”

Equity outflows were led by a dramatic pullback from once-popular growth areas.

Healthcare stocks, which rallied in 2015, posted their largest outflows since Lipper’s record-keeping began in 1992. Investors pulled nearly $2 billion from the funds during the weekly period, Lipper said.

Financial and banking sector funds - once seen as thriving when the U.S. Federal Reserve hiked rates - lost $1.1 billion to outflows. It was the largest withdrawals since August, according to Lipper. Those shares lost appeal on fresh expectations that market volatility will force the Fed to delay its promised path to higher interest rates.

And investors took $824 million back from technology-sector fund managers, the sixth straight week of such withdrawals, as risk-off sentiment took root, Lipper data showed.

Taxable-bond funds attracted $1.6 billion in new cash during the same period, marking their third straight week of inflows, according to data from the fund research service.

That result was led by $1.2 billion that moved into low-risk U.S. Treasury funds.

While funds focused on investment-grade corporate bonds attracted $551 million in new money - their first inflows since November - riskier high-yield bond funds posted $1 billion in outflows.

Precious metals commodities funds, which include investments tracking gold’s price, took in $631 million during the week, Lipper said, marking their fifth straight week of inflows.

Some investors were willing to take on risk. Overall, non-domestic-focused stock funds took in $1.6 billion over the weekly period, with many investors adding money to developed markets outside the U.S.

And funds targeting the long-battered energy sector attracted $264 million in new money during the week.

Money-market funds posted $4.1 billion in outflows during the weekly period, Lipper said.

Reporting by Trevor Hunnicutt; Editing by Chris Reese, Bernard Orr

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