April 14, 2016 / 10:21 PM / 3 years ago

U.S.-based stock funds post $4.8 billion outflows despite equity rise: Lipper

NEW YORK (Reuters) - Investors in U.S.-based funds pulled $4.8 billion out of stock funds in the week ended April 13, marking the biggest outflows since mid-February even as U.S. shares climbed, data from Thomson Reuters’ Lipper service showed on Thursday.

Funds that specialize in U.S. stocks posted $3.3 billion in outflows, while funds that specialize in non-U.S. stocks posted $1.5 billion in outflows. Funds that specialize in European shares posted $376 million in outflows for an 11th straight week of withdrawals.

Stock mutual funds posted $4.2 billion of the total outflows from stock funds in a fifth straight week of withdrawals, while stock exchange-traded funds posted $561 million in outflows, their first withdrawals since late February.

ETFs are generally believed to represent the investment behavior of institutional investors, while mutual funds are thought to represent the retail investor.

Investors pulled money out of stock funds even as the U.S. benchmark S&P 500 stock index rose 0.8 percent over the weekly period and climbed to its highest level in more than four months.

“It’s a risk-off and it is a flight to safety,” said Pat Keon, research analyst at Lipper. “Investors may be hedging their bets a little with corporate earnings,” he said in reference to the start of the first-quarter earnings season.

Funds that specialize in energy shares attracted $285 million for their biggest inflows in five weeks. Those inflows were more attuned to performance, with the S&P 500 energy index rallying 4.3 percent over the period and benchmark Brent crude oil prices rising nearly 11 percent to four-month highs.

Taxable bond funds attracted $2 billion in new cash, in a second straight week of inflows. Funds that invest in higher-rated investment-grade corporate bonds attracted $824 million in a sixth straight week of new demand, while riskier high-yield bond funds attracted just $85 million.

Investors also pulled $70 million out of funds that specialize in safe-haven U.S. Treasuries, for a seventh straight week of outflows. The Barclays U.S. Treasury Index was little changed over the weekly period.

Low-risk money market funds posted $5.1 billion in outflows for a second straight week of withdrawals.

Reporting by Sam Forgione; Edited by Jennifer Ablan and Leslie Adler

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