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UPDATE 1-U.S.-based taxable bond funds post $1.8 bln outflows in week -Lipper
March 12, 2015 / 10:22 PM / 3 years ago

UPDATE 1-U.S.-based taxable bond funds post $1.8 bln outflows in week -Lipper

(Adds additional flow data, details on market performance,
analyst comment, table, byline)
    By Sam Forgione
    NEW YORK, March 12 (Reuters) - Investors in U.S.-based funds
pulled $1.8 billion out of taxable bond funds in the week ended
March 11 on increased expectations that the Federal Reserve will
hike interest rates in June, data from Thomson Reuters' Lipper
service showed on Thursday. 
    Funds that specialize in safe-haven U.S. Treasuries posted
$1.7 billion in outflows, their third straight week of
withdrawals, while riskier high-yield bond funds posted $2
billion in outflows to mark their biggest withdrawals since
December. 
    A robust U.S. jobs report for February raised expectations
that the Fed will hike rates sooner, a move which is expected to
hurt bond prices. 
    While the outflows marked the first overall withdrawals in
10 weeks, they all came from exchange-traded funds. ETFs' mutual
fund counterparts still saw inflows of $2.1 billion, although
that was at their weakest level in seven weeks.
    Taxable bond ETFs posted $3.9 billion in outflows, just
under the prior week's total. 
    Mutual funds are commonly purchased by retail investors,
which ETFs are thought to represent the institutional investor. 
    "The retail crowd wasn't intimidated - it was really the
institutional crowd that was getting skittish," said Jeff
Tjornehoj, head of Americas research at Lipper, in reference to
fears of a June rate hike. "The ETF outflows reflect the
sentiment of investors capable of quick decisions."     
    Stock funds attracted just under $1 billion to mark their
fifth straight week of inflows. All of the cash, at $5.5
billion, went toward funds that specialize in stocks outside the
United States, while U.S.-focused stock funds posted their
biggest outflows since early February, at $4.5 billion. 
    The cash also went toward stock mutual funds, which
attracted $1.7 billion, while stock ETFs posted $703 million in
outflows.
    Funds that specialize in European shares attracted $924
million, their seventh straight week of inflows, as the European
Central Bank began its 1-trillion euro stimulus program on March
9. European shares hit seven-year highs over the period as the
euro slumped to a 12-year low against the dollar. [ID:
nL1N0WE2E7]
    The biggest inflows into European ETFs went toward the
iShares: Currency Hedged MSCI EMU ETF, which can offer
exposure to European stocks while hedging against a stronger
dollar. 
    The weekly Lipper fund flow data is compiled from reports
issued by U.S.-domiciled mutual funds and exchange-traded funds.
    The following is a broad breakdown of the flows for the
week, including exchange-traded funds (in $ billions): 
 Sector                   Flow Chg  %       Assets      Count
                          ($Bil)    Assets  ($Bil)      
 All Equity Funds         0.994     0.02    5,108.169   11,475
 Domestic Equities        -4.523    -0.12   3,701.336   8,257
 Non-Domestic Equities    5.517     0.38    1,406.833   3,218
 All Taxable Bond Funds   -1.826    -0.08   2,293.722   5,967
 All Money Market Funds   19.622    0.83    2,377.855   1,272
 All Municipal Bond       0.153     0.04    345.862     1,463
 Funds                                                  
 
 (Reporting by Sam Forgione; Editing by Chris Reese and
Christian Plumb)

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