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Investors favor bond funds after Fed action - ICI
September 26, 2012 / 7:30 PM / 5 years ago

Investors favor bond funds after Fed action - ICI

By Sam Forgione
    NEW YORK, Sept 26 (Reuters) - Investors in U.S.-based mutual
funds continued to pump money into bond funds while withdrawing
the most from equity funds this month after the Federal Reserve
announced its new stimulus plan, data from the Investment
Company Institute showed for the latest week. 
    Bond funds attracted estimated net inflows of $8 billion in
the week ended Sept. 19, slightly trailing the previous week's
23-week high of $8.11 billion, said ICI, a U.S. mutual fund
trade organization. 
    Equity funds, meanwhile, saw estimated net outflows of $5.16
billion, the most since the week ended Aug. 22. More than $4.8
billion of the money left funds that target U.S. stocks, despite
a rally in those stocks over the period.
    The benchmark S&P 500 rose 1.71 percent over the
reporting period after the Fed announced that it would buy $40
billion in agency mortgage-backed securities per month until the
U.S. jobs market improves.
    Hybrid funds, which can invest in stocks and fixed income
securities, saw inflows of $1.64 billion, the most in four
weeks.
    Municipal bond funds, however, saw meager inflows of $446
million, the least since mid-April and sharply lower than
inflows of $1.31 billion the previous week. 
    The following table shows a breakdown of ICI flows for the
past five weeks (all figures in millions of dollars):
    
               8/22/12  8/29/12  9/5/2012  9/12/2012  9/19/2012
 Total Equity   -5,866   -4,511    -3,308     -3,212     -5,158
    Domestic    -4,462   -3,708    -3,082     -2,668     -4,803
    World       -1,404     -803      -225       -545       -355
 Hybrid*         2,412      866       910      1,305      1,636
 Total Bond      6,828    6,383     4,901      8,111      7,997
    Taxable      5,906    5,386     4,158      6,798      7,551
    Municipal      923      997       743      1,313        446
 Total           3,375    2,738     2,504      6,204      4,474
 *Hybrid funds can invest in stocks and/or fixed income
securities.

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