U.S.-based domestic stock funds have second week of outflows - ICI


By Sam Forgione NEW YORK, Dec 11 (Reuters) - Investors in U.S.-based mutual funds pulled more than $1 billion from funds that mainly hold U.S. stocks in the latest reporting period on fears of a potential pullback in the Federal Reserve's bond-buying program, data from the Investment Company Institute showed on Wednesday.

The outflows of $1.05 billion from funds that hold U.S. stocks over the eight-day period ended Dec. 4 marked the second straight period of investor withdrawals from the funds, the data from ICI, a U.S. mutual fund trade organization, showed.

Meanwhile, funds that mainly hold stocks of companies outside the United States attracted nearly $3 billion in new cash, marking 31 straight weeks of inflows into the funds.

The demand for funds that hold non-U.S. stocks offset the outflows from funds holding U.S. stocks and led to net inflows of more than $1.9 billion into stock funds overall.

The Standard & Poor's 500 stock index fell 0.6 percent over the reporting period on conflicting data on the strength of the U.S. economy. The data has fueled uncertainty over when the Federal Reserve would scale back its $85 billion in monthly bond-buying.

Investors pulled $4.4 billion out of bond funds, down slightly from the prior week's outflows and marking the 10th straight week of withdrawals from the funds. Funds that hold municipal bonds had outflows of about $1.4 billion, marking the largest outflows in seven weeks.

Bond prices fell over the reporting period on the worries that the Fed could reduce its bond-buying, which analysts have said will lead to a spike higher in interest rates. The Fed next meets on Dec. 17-18.

The benchmark 10-year U.S. Treasury yield rose to 2.85 percent at one point last Wednesday, marking its highest level since mid-September after a strong U.S. private-sector jobs report. Bond yields move inversely to their prices.

Hybrid funds, which can invest in stocks and fixed income securities, attracted $894 million in new cash, up slightly from the previous week and marking their ninth straight week of inflows.

The following table shows estimated ICI flows for the past five weeks (all figures in millions of dollars): 11/6/13 11/13 11/20 11/26 12/4 Total Equity 8,576 7,235 5,589 1,494 1,937 Domestic 4,934 3,952 1,116 -1,431 -1,048 World 3,642 3,283 4,473 2,925 2,985 Hybrid* 1,396 1,477 1,538 870 894 Total Bond -3,431 -7,496 -3,269 -4,838 -4,419 Taxable -2,599 -6,362 -2,174 -3,799 -3,068 Municipal -833 -1,134 -1,094 -1,039 -1,351 Total 6,541 1,216 3,858 -2,475 -1,587 *Hybrid funds can invest in stocks and/ or fixed income securities.

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