November 22, 2017 / 5:39 PM / a year ago

U.S. bond fund investors stirred, not shaken

    By Trevor Hunnicutt
    NEW YORK, Nov 22 (Reuters) - U.S. fund investors pumped
millions into bond funds for a 50th straight week, the
Investment Company Institute (ICI) said on Wednesday, showing
that caution in recent weeks may not portend a flight from debt
    Taxable-bond mutual funds and exchange-traded funds (ETFs)
took in $839 million during the turbulent week ended Nov. 15,
the lowest in nearly a year, as high-yield debt came under
pressure, according to the trade group.
    But the funds still have not posted a week of outflows in
nearly a year that has seen them pull in nearly $270 billion,
according to Thomson Reuters' Lipper research unit. 
    This year, as markets have been transfixed by stocks and
other risk assets scaling record peaks, bonds have been the
clear winner among U.S. funds, taking in more than $2 for every
$1 gathered by their equity counterparts, according to data from
    "There's not a lot of value for the amount of risk that
you're taking in the high-yield market," said Tracie McMillion,
head of global asset allocation at Wells Fargo & Co's
Investment Institute, referring to higher-risk bonds issued by
corporations and local municipalities.
    "We don't think this is the end of the bull market. We just
think we're later in the cycle so it's a time to start getting a
little more cautious."
    U.S. fund investors walloped high-yield funds with their
fourth-largest weekly withdrawals on record during the week
ended Nov. 15, according to Lipper, as investor sentiment
deteriorated following setbacks to several corporate mergers and
in U.S. tax reform efforts.
    The funds have brought some of that money back in the days
    Overall, bond funds took in $1.5 billion during the week,
aided by a 19th straight week of flows into municipal funds, ICI
said. Stock funds posted $54 million in outflows, with $4.2
billion in domestic stock outflows almost offset by a 50th
consecutive week of inflows for funds focused abroad.
    The following table shows estimated ICI flows for mutual
funds and ETFs (all figures in millions of dollars):
               11/15   11/8    11/1    10/25   10/18/2017
 Equity        -54     2,851   -1,624  9,999   12,609
    Domestic   -4,214  -3,660  -5,454  5,159   6,968
    World      4,160   6,511   3,830   4,840   5,641
 Hybrid        -359    -373    -999    -506    -724
 Bond          1,468   5,412   7,450   10,854  9,324
    Taxable    839     4,509   7,224   9,942   8,383
    Municipal  630     903     226     913     941
 Commodity     136     -153    -242    98      -428
 Total         1,191   7,737   4,585   20,445  20,781
 (Reporting by Trevor Hunnicutt; Editing by David Gregorio)
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