(Adds details on funds, quote, table, byline)
By Trevor Hunnicutt
NEW YORK, Nov 15 U.S. fund investors are
maintaining a wary position when it comes to bonds, pulling more
cash after record withdrawals in October, Lipper data showed on
Taxable bond mutual funds and exchange-traded funds (ETFs)
based in the United States posted $1.2 billion in withdrawals
during the week ended Nov. 14, Lipper said. Investors pulled
$131 million from municipal bond funds in the eighth straight
week of withdrawals for those products.
In October, more than $53 billion tumbled out of U.S.-based
taxable bond funds, the largest withdrawals on records dating to
1992, according to Lipper. October marked only the 12th time
since the March 2009 dawn of the U.S. bull market that stocks
and bonds fell in tandem.
DoubleLine Capital LP portfolio manager Monica Erickson on
Thursday told the Reuters Global Investment 2019 Outlook Summit
that the withdrawals could continue as investors respond poorly
to poor returns, particularly in investment-grade bonds widely
held by retail investors as a source of stability.
"Investors open their statements and they look at their
statements and they see that it's negative," said Erickson.
On other the end of the credit spectrum, low-risk money
market funds, where investors park cash, took in $12.4 billion,
marking a fourth straight week netting new money.
Debt-buying fund managers have struggled to keep investors
happy as losses start to pile up from rising rates that erode
The Federal Reserve has raised interest rates three times
this year, to a range of 2 percent and 2.25 percent, and the
central bank is expected to raise rates another quarter
percentage point in December.
Erickson said the Fed risks tightening monetary policy too
Also hurting demand for bonds during the week was a rebound
in interest in risk-taking in the stock market. Relatively
low-risk Treasury funds posted $1.1 billion in withdrawals,
while stock funds took in $2.7 billion.
Rate-sensitive utilities sector funds pulled in $775
million, the most since December 2014. And healthcare funds
pulled in $1.7 billion, the most since the aftermath of the
November 2016 U.S. presidential election.
Some investors see gridlock after congressional elections
this month that left the two houses of U.S. Congress split
between Democrats and Republicans as helping to tamp down
potential action to lower drug prices.
The following is a breakdown of the flows for the week,
including mutual funds and ETFs:
Sector Flow Chg Pct of Assets Count
($ blns) Assets ($ blns)
All Equity Funds 2.656 0.04 6,971.763 12,226
Domestic Equities 2.166 0.04 4,979.827 8,674
Non-Domestic Equities 0.490 0.02 1,991.936 3,552
All Taxable Bond Funds -1.243 -0.04 2,765.325 6,032
All Money Market Funds 12.409 0.45 2,793.690 1,038
All Municipal Bond Funds -0.131 -0.03 421.202 1,441
(Reporting by Trevor Hunnicutt; editing by Leslie Adler,
Jennifer Ablan and Tom Brown)
NEW YORK DoubleLine Capital LP portfolio manager Monica Erickson has a problem. She thinks the investment-grade corporate bond market, which is her specialty, is the worst place to be for bond investors.
NEW YORK Several prominent investors raised their stakes in General Electric Co in the third quarter, before its shares sank in recent weeks, filings with the U.S. Securities and Exchange Commission showed on Wednesday.
NEW YORK Increased regulation of U.S. technology companies is one of the biggest risks to a sector that has led stocks higher, potentially derailing the market's near-decade-long bull run if it suffers a sustained selloff.
By Trevor Hunnicutt
NEW YORK, Nov 14 U.S. fund investors tip-toed
back into world debt markets one week after fleeing bonds at the
fastest pace since 2013, according to the Investment Company
U.S.-based bond mutual funds and exchange-traded funds
(ETFs) took in $777 million during the week ended November 7,
compared to withdrawals of $18.6 billion the week prior, the
trade group said.
The shift is largely due to the fact that a sharp rise in
interest rates this year has petered out in recent weeks,
pushing investors to reconsider buying bonds as stocks grew more
Demand for municipal funds, however, remained negative for a
seventh straight week.
The typically steady U.S. municipal bond market has seen
continuous fund outflows, weaker prices and rising supply in
recent weeks, coupled with an expected bump in year-end tax-loss
Equity funds based in the United States, meanwhile, recorded
$151 million in withdrawals, after two straight weeks taking in
cash, ICI said. Funds focused on shares abroad attracted $3.8
billion while domestic-oriented equity products saw withdrawals
of a roughly equal amount.
The following table shows estimated ICI flows for mutual
funds and ETFs (all figures in millions of dollars):
11/7 10/31 10/24 10/17 10/10/2018
Equity -151 5,642 3,054 -12,822 -2,542
Domestic -3,972 6,377 4,012 -14,426 -3,044
World 3,820 -735 -958 1,605 502
Hybrid -2,990 -3,438 -2,215 -2,574 -1,812
Bond 777 -18,600 -7,043 -5,637 -7,137
Taxable 1,686 -17,404 -6,865 -4,327 -5,484
Municipal -909 -1,196 -179 -1,310 -1,653
Commodity -72 43 344 211 138
Total -2,436 -16,353 -5,860 -20,821 -11,352
(Reporting by Trevor Hunnicutt; editing by Diane Craft)
NEW YORK MSCI Inc on Tuesday said it would add several onshore Chinese stocks to its closely watched and widely duplicated emerging-markets index.
NEW YORK A top Pacific Investment Management Co economist said on Tuesday the U.S. Federal Reserve risks damaging economic growth while trying to restore rates to normal levels and trade tensions spark inflation.
NEW YORK Guggenheim Partners Global Chief Investment Officer Scott Minerd warned on Monday that the U.S. economy is on a collision course due to excessive corporate debt and said he has prepared by buying higher credit-quality investments.
NEW YORK Investors hope the split between Republicans and Democrats controlling the U.S. Congress will open up opportunities to pick new winners and losers because some government policies will be harder to predict.
NEW YORK, Nov 7 Investors hope the split between
Republicans and Democrats controlling the U.S. Congress will
open up opportunities to pick new winners and losers because
some government policies will be harder to predict.