Reuters: US Dollar Report: UPDATE 1-US equity, money market funds post outlows-Lipper

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UPDATE 1-US equity, money market funds post outlows-Lipper Mar 29th 2012, 23:08 Thu Mar 29, 2012 7:08pm EDT By Daniel Bases NEW YORK, March 29 (Reuters) - Fund investors pulled out of U.S .-domiciled equities and extended their selling of money market funds as global markets turned in a flat performance for the week ended March 28, data from Thomson Reuters' Lipper showed on T hur sday. In the course of the reporting week, the U.S. benchmark Standard & Poor's 500 index rose just 0.19 percent. "Equity funds saw an outflow and certainly that makes sense given people are taking their spring breaks with markets up 12 percent or so for the quarter to date and they might just take some profits while on vacation," said Tom Roseen, head of research services at Lipper. Equity funds had net outflows of $2.6 billion for the week. Excluding exchange-traded funds, which anecdotally are believed to represent institutional investor behavior, outflows were just $184 million, the data showed. The picture for ETFs was mixed, however, as the large-cap State Street SPDR S&P 500 ETF had net inflows of $2.936 billion, while the small-cap BlackRock iShares Russell 2000 index ETF posted $1.77 billion in net redemptions. "I think some people were thinking they missed the boat on stocks so to get in quickly, they took some chances and jumped back in with ETFs," said Roseen. Money market funds had net outflows of $12.17 billion, representing a fifth consecutive week of redemptions. The end of the tax year played a part as well as the liquidation of money market funds, Roseen said. According to Lipper, Ohio-based Victory Funds is liquidating its money market funds next month. Speaking generally, Roseen said the rationale could be found in the potential increase in government regulation. "The markets are also so low given where interest rates are it then raises the question on profitability. Smaller fund managers may say 'enough is enough,'" Roseen added. After four weeks of ebbing net inflows, equity income funds for the first time since mid-May 2011 had net redemptions. In the latest week, the fund group had net outflows of $95 million. Equity income funds have been an attractive alternative for investors hunting for yield in a near-zero interest rate environment. Taxable bound funds pulled in a net $4.4 billion, while municipal bond funds garnered an additional $430 million in capital at the end of the reporting week. Investment grade bond funds pulled in a net $1.5 billion while the high-yield debt category drew in $457 million in fresh capital. In emerging markets, debt funds had $161 million of net inflows and equities pulled in a slightly higher $177 million. The weekly Lipper fund flow data is compiled from reports issued by U.S .-domiciled mutual funds and exchange-traded funds. The following is a broad breakdown of the flows for the week, including exchange-traded funds (in $ billions): Sector Flow Chg % Assets Count ($ bln) Assets ($ bln) All Equity Funds -2.646 -0.09 2,887.039 10,318 Domestic Equities -2.120 -0.10 2,190.725 7,752 Non-Domestic Equities -0.526 -0.08 696.314 2,566 All Taxable Bond Funds 4.402 0.32 1,392.831 4,533 All Money Market Funds -12.167 -0.52 2,326.506 1,451 All Municipal Bond Funds 0.430 0.15 289.244 1,376 Link this Share this Digg this Email Reprints

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