Reuters: US Dollar Report: Inflows for fixed income funds a safety move-Lipper

Reuters: US Dollar Report Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

Inflows for fixed income funds a safety move-Lipper May 4th 2012, 00:09 Thu May 3, 2012 8:09pm EDT By Daniel Bases NEW YORK, May 3 (Reuters) - Fund investors added cash to U.S. domiciled fixed income funds, treading a cautious path in the week ended May 2 that led to significant purchases of low-yielding U.S. Treasuries, data from Thomson Reuters Lipper service showed on Thursday. In the course of the reporting week, investors absorbed the news that U.S. economic growth in the first quarter, preliminarily, was below expectations while Spain's credit rating was slashed two notches by Standard & Poor's. Taxable bond funds pulled in a net $5.5 billion in the latest week. Included in this category are funds that primarily focus their attention on safe U.S. Treasuries, whose net inflows of $1.235 billion were the third largest weekly intake on record and the largest since the week ended June 21, 2006. During the reporting week investors were buying Treasuries when the closing yield on benchmark 10-year issue remained below 2 percent, an area on the yield curve it has consistently occupied since April 12. Equity funds pulled in nearly $4 billion of fresh capital, but this was due entirely to the net purchasing of exchange traded funds, an investment vehicle that is anecdotally viewed as being a hedging tool by the professional investment community. "On the surface, the equity fund inflows were interesting given the disappointing economic news on U.S. GDP and the further downgrade of Spain. I was generally surprised to see the market as calm as it was given what was going on," said Matthew Lemieux, analyst at Lipper. "This shift from equity into fixed income signals to me a little bit of concern in the market and a short-term risk-off mentality," he added. Among the ETFs, the large-cap State Street SPDR S&P 500 ETF pulled in the most fresh investment, with net inflows of $3.867 billion. Excluding ETFs, equity funds had net outflows of $379 million, indicating the retail investor community was negative on the market during a week when the U.S. benchmark Standard & Poor's 500 stock index rose just 0.84 percent. Funds that focus on U.S. registered equities had net outflows of $675 million. Those focused on non-U.S. registered stocks had net inflows of $296 million. Equity income funds, which invest primarily in stocks offering dividends, remain an alternative to investors whose portfolios have returned paltry sums given low yields on fixed income investors. This category pulled in a net $483 million in the last week and has only had a net outflow eight times in the last two years. Other equity sectors that received fresh capital include financial/banking; healthcare/biotechnology; real estate; and utilities. Technology and energy sector funds had modest net outflows. Small-cap funds had net outflows of $595 million while the aggressive growth category, that is funds which involve greater risk factors, had net outflows of $301 million. Money market funds had net outflows of $16.4 billion, marking net redemptions for the seventeenth time in the last nineteen weeks. Tax-free municipal bond funds garnered a net $447 million in new money. The reduction in risk profiles also included a solid move into higher quality corporate investment grade bond funds, with a net inflow of $1.355 billion, the Lipper data showed. 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 ($Bil) Assets ($Bil) All Equity Funds 3.903 0.14 2,851.237 10,335 Domestic Equities 3.432 0.16 2,160.601 7,749 Non-Domestic Equities 0.471 0.07 690.636 2,586 All Taxable Bond Funds 5.536 0.40 1,413.066 4,607 All Money Market Funds -16.416 -0.72 2,265.584 1,421 All Municipal Bond Funds 0.447 0.15 294.459 1,363 Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions