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UPDATE 1-U.S.-based Treasury-heavy funds post $2.2 bln outflows in week - Lipper
May 28, 2015 / 9:52 PM / 2 years ago

UPDATE 1-U.S.-based Treasury-heavy funds post $2.2 bln outflows in week - Lipper

(Adds views from head of Americas research at Lipper, table)
    By Sam Forgione
    NEW YORK, May 28 (Reuters) - Investors in U.S.-based funds
pulled $2.2 billion out of funds that mainly hold U.S.
Treasuries in the week ended May 27, data from Thomson Reuters'
Lipper service showed on Thursday. 
    The outflows were the first in three weeks and the biggest
since early March. Taxable bond funds overall posted $2.1
billion in outflows to mark their first withdrawals in three
weeks.
    Stock funds attracted $221 million in new cash after posting
$1.7 billion in withdrawals the prior week. Emerging market
stock funds posted their 10th straight week of inflows, at $270
million.
    The Barclays U.S. Treasury Index rose 0.5 percent over the
latest weekly period.
    Treasury yields rose after Federal Reserve Chair Janet
Yellen on May 22 said she expected U.S. interest rates to rise
this year. But longer-dated yields tumbled earlier this week on
month-end buying and after a rally in the U.S. dollar made U.S.
government debt more attractive to investors. 
    Yields move inversely to prices.
    Jeff Tjornehoj, head of Americas research at Lipper, said
$1.6 billion of Treasury outflows came from the iShares Short
Treasury Bond ETF, which specializes in U.S. Treasuries
that mature in less than one year. Shorter-dated Treasuries are
sensitive to expectations regarding the timing of the Fed's
policy moves.
    Investors are probably concerned a rate hike is coming later
this year, Tjornehoj said. 
    "Investors may have grown frustrated with the lack of
returns in the short end of the yield curve, which started the
year on fire," he said. "A $10,000 investment in SHV at the
beginning of the year is only worth $10,004 today. Interest
rates are low, but you can do better than that."
    He added that the long-maturity product, iShares 20+ Year
Treasury Bond ETF, saw cash withdrawals of $257 million.
    Overall, U.S.-based domestic-focused stock funds posted $4.2
billion of outflows, their second straight week of net
withdrawals, while U.S.-based non-domestic focused stock funds
attracted $4.5 billion of inflows, their 16th straight week of
inflows.
        
    The following is a broad breakdown of the flows for the
week, including exchange-traded funds (in $ billions):   
     Sector        Flow Change     Pct         Assets     Count
                    ($ blns)      Assets     ($ blns)     
 All Equity       0.221          0.00      5,458.659      11,660
 Funds                                                    
 Domestic         -4.236         -0.11     3,893.970      8,387
 Equities                                                 
 Non-Domestic     4.457          0.28      1,564.689      3,273
 Equities                                                 
 All Taxable      -2.067         -0.09     2,367.547      6,045
 Bond Funds                                               
 All Money        -0.732         -0.03     2,283.240      1,268
 Market Funds                                             
 All Municipal    -0.205         -0.06     346.469        1,479
 Bond Funds                                               
 
 (Reporting by Sam Forgione)

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