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UPDATE 1-U.S.-based taxable bond funds attract $7.7 bln inflows-Lipper
February 12, 2015 / 10:53 PM / 3 years ago

UPDATE 1-U.S.-based taxable bond funds attract $7.7 bln inflows-Lipper

(Adds flow data, analyst comment)
    By Sam Forgione
    NEW YORK, Feb 12 (Reuters) - Investors in U.S.-based funds
poured $7.7 billion into taxable bond funds in the week ended
Feb. 11, with investors favoring higher-risk debt after a strong
U.S. jobs report, data from Thomson Reuters' Lipper service
showed on Thursday. 
    The inflows marked the funds' sixth straight week of net
positive demand. Riskier high-yield bond funds attracted $2.9
billion, with the iShares iBoxx $ High Yield Corporate Bond ETF
 attracting $924 million - its biggest inflows since
Lipper began tracking the exchange-traded fund in 2007.
    Stock funds attracted $4.3 billion in inflows, with all of
the new cash flowing into stock ETFs, which are thought to
reflect the behavior of the institutional investor. Stock mutual
funds, however, which are commonly purchased by retail
investors, posted $216 million in outflows. 
    The inflows into higher-yielding bond funds and stock funds
showed heightened risk appetite after a stronger-than-expected
U.S. payrolls report for January. Bond investors were reassured,
even as the report suggested a greater likelihood of a Federal
Reserve rate hike by mid-year. 
    "There's definitely a little more risk-taking," said Jeff
Tjornehoj, head of Americas research at Lipper. "Investors still
regard a rate hike as speculative, and they're not threatened by
that so much as they are made more enthusiastic by this jobs
report."
    Funds that specialize in safe-haven U.S. Treasuries posted
$126 million in outflows, marking their first weekly net
withdrawal in five weeks. That followed $5.2 billion in inflows
the prior week, which were their biggest in a year.
    Safer investment-grade corporate bond funds attracted cash,
albeit less than high-yield funds, at $2.3 billion.
    European stock funds attracted $339 million in new cash,
marking their third straight week of inflows despite fears of a
Greek exit from the euro zone.
    Lipper's Tjornehoj also said meetings between euro zone
finance ministers during the period boosted hopes for Greece's
status in the euro zone.
    Funds that specialize in energy stocks posted $667 million
in outflows, their biggest since last October. Oil prices ended
a three-day rally over the period.
    "Anyone getting into energy is taking on Vegas odds right
now - they're gambling," Tjornehoj said.
    Low-risk money market funds attracted $2.8 billion, their
first inflows in six weeks. 
    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 Change   Assets    Assets      Count
                                   (%)                   
 All Equity Funds    4.297         0.08      5,117.682   11,449
 Domestic Equities   2.743         0.07      3,732.789    8,239
 Non-Domestic        1.554         0.11      1,384.893    3,210
 Equities                                                
 All Taxable Bond    7.676         0.33      2,309.938    5,964
 Funds                                                   
 All Money Market    2.828         0.12      2,378.096    1,275
 Funds                                                   
 All Municipal Bond  0.460         0.13        345.530    1,465
 Funds                                                   
 
 (Reporting by Sam Forgione; editing by Diane Craft and G
Crosse)

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