April 11, 2019 / 9:55 PM / 2 months ago

UPDATE 1-U.S.-based investment-grade bond funds extend 2019's weekly inflow streak

 (Adds quotes from head of research services at Lipper, table)
    By Jennifer Ablan
    April 11 (Reuters) - Investors put money to work in
corporate credit markets in the latest week, with U.S.-based
investment-grade corporate bond funds attracting about $3.47
billion in the week ended on  Wednesday, the group's 11th
consecutive weekly inflow, according to Refinitiv's Lipper
research service data on Thursday.
    Appetite returned for their equity counterparts. U.S.-based
equity funds attracted over $4.27 billion in the week ended on
Wednesday, reversing the previous two weeks of cash withdrawals
totaling about $15 billion. 
    Tom Roseen, head of research services at Lipper, noted that
while equity exchange-traded fund (ETF) flows remained solidly
positive at over $10.3 billion, "conventional equity funds
investors remained net redeemers for the week, pulling out $6
billion for the week."
    Investors in exchange-traded funds are thought to represent
the institutional investor, including hedge funds. Mutual funds
are thought to represent retail investors. "Despite plus-side
returns for most of the broadly followed U.S. indices, investors
remained cautious after learning February factory orders fell
more than economists expected and ahead of the start of the Q1
2019 earnings reporting period," Roseen added. 
    Fixed-income funds enjoyed another week of demand, thanks to
Federal Reserve officials' pledge to be patient in raising
interest rates this year. 
    U.S.-based taxable bond funds attracted over $4.8 billion in
the week ended Wednesday, extending their weekly inflow streak
since March. U.S.-based high-yield bond funds attracted about
$655 million for the week ended Wednesday, their fifth
consecutive week of inflows, Lipper said.
    "The Federal Reserve’s dovish tone in its March meeting
minutes along with tame wage growth numbers and news that the
IMF lowered its outlook for global economic growth to 3.3% for
2019 were boons for longer-dated bond securities," Roseen said.
"Investors were betting that neither the Fed nor other central
banks were likely to hike rates anytime soon."
    The following is a broad breakdown of the flows for the
week, including mutual funds and exchange-traded funds:
 Sector                    Flow       %       Assets     Count
                           Change     Assets  ($ blns)   
                           ($ blns)                      
 All Equity Funds          4.270      0.06    7,432.47   12,080
 Domestic Equities         4.769      0.09    5,283.83   8,590
 Non-Domestic Equities     -0.498     -0.02   2,148.64   3,490
 All Taxable Bond Funds    4.824      0.17    2,876.81   5,948
 All Money Market Funds    -8.644     -0.29   2,968.99   1,009
 All Municipal Bond Funds  0.956      0.21    455.92     1,401
 (Reporting by Jennifer Ablan
Editing by James Dalgleish)
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