United States

Trevor Hunnicutt

UPDATE 1-Investors pull record $53 bln from U.S. taxable funds in October -Lipper

Nov 15 2018

(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 Thursday. 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 bond prices. 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 much. 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)

DoubleLine Capital LP warns on U.S. investment-grade bonds

Nov 15 2018

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.

Several high-profile funds raised stakes in GE before selloff: filings

Nov 14 2018

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.

Technology investors fear regulators' net

Nov 14 2018

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.

U.S.-based fund investors test waters in bond market -ICI

Nov 14 2018

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 Institute (ICI). 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 volatile. 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 selling. 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)

MSCI adds more China stocks to global emerging markets index

Nov 14 2018

NEW YORK MSCI Inc on Tuesday said it would add several onshore Chinese stocks to its closely watched and widely duplicated emerging-markets index.

Pimco's Fels says Fed risks hiking rates too fast

Nov 13 2018

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.

Guggenheim's Minerd says high corporate debt bodes ill for U.S. economy

Nov 12 2018

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.

U.S. political gridlock may create investment opportunity

Nov 09 2018

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.

RPT-ANALYSIS-U.S. political gridlock may create investment opportunity

Nov 08 2018

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.

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