December 21, 2017 / 11:01 PM / a month ago

UPDATE 1-U.S.-based equity funds post $22 bln of outflows, largest withdrawals in 2017

 (Adds quotes from senior research analyst)
    By Jennifer Ablan
    NEW YORK, Dec 21 (Reuters) - U.S.-based equity funds posted
$22.2 billion of outflows in the week ended Dec. 20, the largest
cash withdrawals for 2017, according to Lipper data on Thursday.
    U.S.-based equity mutual funds posted $12.2 billion of
outflows in the week ended Wednesday, extending weekly cash
withdrawals for most of 2017. And U.S.-based stock ETFs posted
$10 billion of outflows in the week ended Dec. 20, the largest
cash withdrawals in 2017, Lipper said.
    Investors' risk aversion spread to bonds. U.S.-based
high-yield "junk" bond funds posted $1.1 billion of outflows in
the week ended Dec. 20, the group's second consecutive week of
cash withdrawals, according to Lipper.
    "Money leaving high-yield bonds and equity funds - as well
as going to investment-grade corporates - are risk-off
strategies," said Pat Keon, Thomson Reuters Lipper's senior
research analyst. "Also, both groups have struggled all year –
equity mutual funds net outflows of negative $141 billion,
high-yield bond funds at negative $22.1 billion."
    U.S.-based investment-grade corporate bond funds attracted
$1.14 billion of inflows in the week ended Dec. 20, extending
the group's weekly inflow streak since late September, Lipper
said.
    Equity ETFs stole the spotlight, however. Equity will have
record net inflows of $265 billion this year and "this current
week's net outflow broke a streak of 10 straight inflows," Keon
said.
    "While it is a high number, unless a multiple-week trend
takes hold, I would not find it too concerning," Keon said.
    "Despite the run-up in the Dow and the good economic numbers
we’re seeing lately, we don’t always see it reflected in net
inflows for funds. We speculate that fund investors appear to be
overly cautious waiting for a market correction and/or a
geopolitical or internal political crisis to worsen."
    U.S.-based money market funds posted $21.2 billion of
outflows in the week ended Dec. 20, following six weeks of
inflows, Lipper data showed.
    The following is a breakdown of the flows for the week,
including mutual funds and ETFs:
 Sector                 Flow Chg      Pct of  Assets      Count
                        ($ blns)      Assets  ($ blns)    
 All Equity Funds       -22.221       -0.35   6,452.399   12,076
 Domestic Equities      -18.597       -0.43   4,347.903   8,601
 Non-Domestic Equities  -3.624        -0.17   2,104.496   3,475
 All Taxable Bond       -3.250        -0.12   2,608.002   6,031
 Funds                                                    
 All Money Market       -21.209       -0.79   2,653.279   1,039
 Funds                                                    
 All Municipal Bond     0.251         0.06    399.695     1,471
 Funds                                                    
 
 (Reporting by Jennifer Ablan; Editing by James Dalgleish)
  
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