December 15, 2017 / 12:04 AM / 9 months ago

UPDATE 1-Investors pull most money in 2017 from U.S. stock funds -Lipper

 (New throughout, adds details, comments from head of research
services at Thomson Reuters Lipper, table)
    By Trevor Hunnicutt
    NEW YORK, Dec 14 (Reuters) - Investors pulled $16.2 billion
from U.S.-based equity funds during the latest week, according
to Lipper on Thursday, marking the largest withdrawals since
December 2016.
    Taxable-bond mutual funds and exchange-traded funds recorded
$1.2 billion in outflows, with U.S.-based high-yield junk bond
funds posting outflows of $922 million in the latest week ended
Wednesday. On the other end of the spectrum, safer U.S.-based
money-market funds posted more than $30 billion of inflows, the
research service said. U.S.-based government-Treasury funds also
saw healthy inflows for the week, as investors poured over $1.15
billion into the sector, Lipper said. 
    Tom Roseen, head of research services at Thomson Reuters
Lipper, noted that the broad-based indices generally rallied to
new highs during the fund-flow week, with the Dow Jones
Industrial Average closing the flows week up 1.84 percent, while
the S&P 500 Index rose 1.28 percent. 
    "Nonetheless, fund investors appeared to be content sitting
on the sidelines, taking some of their equity-related winnings
off the table ahead of the holiday season," Roseen said. 
    Year-to-date, the Dow and the NASDAQ Composite indices are
up 24.40 percent and 27.73 percent, respectively.   
    Roseen said tax selling was also at play during the outflow
week for equity funds. "It makes sense that investors might be
making strategic moves ahead of the implementation of the FIFO
rule (first-in-first-out tax treatment on the sale of
securities) suggested," he said. "In a hugely up market like we
have seen, it makes sense to use your losers to help offset
realized gains. So there is probably some take loss-selling
going on."
    For the 38th consecutive week, conventional fund
(ex-Exchange Traded Fund) investors were net redeemers of equity
funds, redeeming $19.3 billion for the flows week - its fourth
largest weekly net outflows on record, according to Lipper data.
    Domestic equity funds (ex-ETFs) posted outflows of more than
$18.5 billion - their largest weekly withdrawals on record -
witnessed their 50th week of net outflows while chalking up a
1.20 percent return on average, Roseen said. Meanwhile, their
non-domestic equity fund counterparts posted a 1.31 percent
return on average, but witnessed net outflows of $779 million in
the weekly period, their group's third straight week of
withdrawals, Roseen said.
    "Interestingly, six of the seven largest weekly net
redemptions for equity funds, ex ETFs, occurred in December,"
Roseen said. "This appears to be a theme."
    The following is a breakdown of the flows for the week,
including mutual funds and ETFs:
 Sector                 Flow Chg     Pct of    Assets    Count
                        ($ blns)     Assets   ($ blns)   
 All Equity Funds     -16.209        -0.25    6,428.901  12,165
 Domestic Equities    -17.337        -0.40    4,330.645  8,681
 Non-Domestic          1.127         0.05     2,098.256  3,484
 Equities                                                
 All Taxable Bond     -1.187         -0.05    2,620.178  6,060
 Funds                                                   
 All Money Market     30.656         1.16     2,672.637  1,030
 Funds                                                   
 All Municipal Bond    0.217         0.05     401.346    1,481
 Funds                                                   
 
 (Reporting by Trevor Hunnicutt; Editing by Jennifer Ablan and
David Gregorio)
  
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