November 14, 2018 / 6:31 PM / a month ago

U.S.-based fund investors test waters in bond market -ICI

    By Trevor Hunnicutt
    NEW YORK, Nov 14 (Reuters) - U.S. fund investors tip-toed
back into world debt markets one week after fleeing bonds at the
fastest pace since 2013, according to the Investment Company
Institute (ICI).
    U.S.-based bond mutual funds and exchange-traded funds
(ETFs) took in $777 million during the week ended November 7,
compared to withdrawals of $18.6 billion the week prior, the
trade group said.
    The shift is largely due to the fact that a sharp rise in
interest rates this year has petered out in recent weeks,
pushing investors to reconsider buying bonds as stocks grew more
 volatile.
    Demand for municipal funds, however, remained negative for a
seventh straight week.
    The typically steady U.S. municipal bond market has seen
continuous fund outflows, weaker prices and rising supply in
recent weeks, coupled with an expected bump in year-end tax-loss
selling.
    Equity funds based in the United States, meanwhile, recorded
$151 million in withdrawals, after two straight weeks taking in
cash, ICI said. Funds focused on shares abroad attracted $3.8
billion while domestic-oriented equity products saw withdrawals
of a roughly equal amount.
    The following table shows estimated ICI flows for mutual
funds and ETFs (all figures in millions of dollars):
               11/7    10/31    10/24   10/17    10/10/2018
 Equity        -151    5,642    3,054   -12,822  -2,542
    Domestic   -3,972  6,377    4,012   -14,426  -3,044
    World      3,820   -735     -958    1,605    502
 Hybrid        -2,990  -3,438   -2,215  -2,574   -1,812
 Bond          777     -18,600  -7,043  -5,637   -7,137
    Taxable    1,686   -17,404  -6,865  -4,327   -5,484
    Municipal  -909    -1,196   -179    -1,310   -1,653
 Commodity     -72     43       344     211      138
 Total         -2,436  -16,353  -5,860  -20,821  -11,352
 
 (Reporting by Trevor Hunnicutt; editing by Diane Craft)
  
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