Thursday, August 30, 2012

Reuters: US Dollar Report: Improved US data brings bump up for high yield fund flows-Lipper

Reuters: US Dollar Report
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Improved US data brings bump up for high yield fund flows-Lipper
Aug 30th 2012, 22:30

Thu Aug 30, 2012 6:30pm EDT

  By Daniel Bases      NEW YORK, Aug 30 (Reuters) - Investors increased the amount  of cash they put to work in U.S. domiciled corporate high yield  debt funds in the week ended Aug. 29, data from Thomson Reuters'  Lipper service showed on Thursday.      Net inflows of fresh capital into the high yield sector  pulled it out of a month-long lull. New investment doubled from  the last week to $1.2 billion.      Overall, U.S. equity mutual funds pulled in a net $2.2  billion during the reporting week, which was in contrast to the  modest 0.21 percent drop in the U.S. benchmark Standard & Poor's  500 stock index.       "Some of the good news we have seen this week, including the  upward revision to GDP and better home prices and consumer  spending, maybe some of that leaked out into the junk market and  investors felt comfortable going in that direction," said  Matthew Lemieux, analyst at Lipper.      On Wednesday, capturing the last day of the reporting week,  the U.S. Commerce Department reported an upward revision to  second quarter economic activity to 1.7 percent from earlier  estimates of 1.5 percent.       The quiet pre-U.S. holiday week, with little drama emanating  from the European Union's debt crisis, and the upbeat U.S. data  led to a healthy $5.8 billion net inflow for mutual funds and  exchange traded funds (ETFs). That figure excludes money market  mutual funds, which had net redemptions of nearly $6 billion.       The pace of growth did not shut the door to possible further  monetary easing by the U.S. Federal Reserve. Fed Chairman Ben  Bernanke could offer more clarity on the outlook for monetary  policy when he speaks at a gathering of central bankers in  Jackson Hole, Wyoming, on Friday.      Taxable bond funds had net inflows of $3.2 billion.      Excluding exchange traded funds, equities had net outflows  of $1.375 billion.      ETFs are generally believed to represent the investment  behavior of institutional investors, while mutual funds are  thought to represent the retail investor.      State Street's SPDR S&P 500 ETF fund pulled in a net  $3.5 billion, representing a bet on large-cap shares. In  contrast small-caps had outflows, represented by $1 billion in  net redemptions from the BlackRock iShares Russell 2000 ETF  .      The anticipation of Bernanke's speech in the preceding weeks  has led to renewed interest in gold. Even though the economic  data has been brighter, there is evidence investors are betting  on more stimulus and the inflationary pressures that would  bring.      The State Street SPDR Gold Fund pulled in a net $402  million in the latest week, a sharp drop off from the prior  week, but still a net positive. The BlackRock iShares Gold Trust   fund saw a sharp increase to $189 million worth of fresh  investment.      "I think people are anticipating that if the Fed continues  their current model (of low interest rates), extends it or adds  quantitative easing it will be good for the gold market," said  Lemieux.      "But I've seen some recent talk that it is a risky bet  because they think it is going to go the other way and with the  good economic news that came out this week people are a little  less optimistic that Bernanke is going to commit to anything at  this point," he added.       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          2.231     0.08    2,821.913   10,191   Domestic Equities         1.794     0.08    2,151.082   7,587   Non-Domestic Equities     0.438     0.06    670.832     2,604   All Taxable Bond Funds    3.198     0.22    1,481.811   4,722   All Money Market Funds    -5.948    -0.26   2,292.994   1,422   All Municipal Bond Funds  0.613     0.20    311.791     1,352  
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