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TABLE-U.S.-based bond funds extend streak of positive inflows
June 28, 2017 / 7:13 PM / 5 months ago

TABLE-U.S.-based bond funds extend streak of positive inflows

    By David Randall
    NEW YORK, June 28 (Reuters) - U.S. investors moved roughly
$6.3 billion into bond funds in the week ended June 21 despite
the Federal Reserve's decision to  hike interest rates the week
before, continuing an unbroken streak of positive weekly inflows
into debt funds for the year to date, Investment Company
Institute data showed Wednesday. 
    The Fed raised its benchmark interest rates to a range
between 1 and 1.25 percent, the third consecutive quarterly
increase, and the central bank has signaled one more rate hike 
this year. 
    Investors are moving into bonds despite rising interest
rates in part because of demographic shifts that now favor
stable income streams, said Alan Gayle, director of asset
allocation at RidgeWorth Investments, which has $40.2 billion in
assets under management. 
    "Typically you don't fight the Fed when it starts raising
rates, but there's a big demographic push toward older savers
that is fooling a lot of traditional cyclical investors," he
said. 
    The U.S. Treasury yield curve flattened to almost 10-year
lows on June 21st, with the yield of the 30-year bond falling to
2.72 percent, the lowest since Nov. 9. 
    Stock funds pulled in $684 million in the week, the smallest
positive gain since July 2016 and a steep decline from the $27.3
billion in inflows the week before. 
    Investors pulled about $7.9 billion from U.S.-focused stock
funds, while moving about $8.6 billion into international funds.
That move toward international stocks reflects stretched
valuations for U.S. stocks, which remain near all-time highs,
Gayle said.
    The following table shows estimated ICI flows for mutual
funds and exchange-traded funds (all figures in millions of
dollars):
                  6/21/17    6/14/17    6/7/17  5/31/17  5/24/17
 Equity               684     27,288    -7,726   13,999     -828
    Domestic       -7,876     19,624   -11,093    8,482   -5,487
    World           8,560      7,664     3,367    5,517    4,659
 Hybrid              -417       -753      -861     -266     -206
 Bond               6,254      7,665    13,621    4,918    8,012
    Taxable         5,332      7,089    12,305    4,674    7,347
    Municipal         922        576     1,316      245      665
 Commodity             90         65       997     -458     -152
 Total              6,612     34,264     6,030   18,193    6,826
 
 (Reporting by David Randall; Editing by Jennnifer Ablan and
Diane Craft)
  

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