Reuters: US Dollar Report: Institutional investors turn back to equity funds -Lipper

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Institutional investors turn back to equity funds -Lipper Aug 2nd 2012, 21:32 Thu Aug 2, 2012 5:32pm EDT NEW YORK, Aug 2(Reuters) - Institutional investors turned back to equity funds in the week ended Aug. 1, although retail investors exited equity funds for the second week in a row, data from Thomson Reuters' Lipper service showed on Thursday. Equity funds recorded net inflows of $5.878 billion in the week, including a net $8.867 billion from exchange traded funds. In contrast, excluding ETFs, retail investors sold a net $2.989 billion of equity funds, accelerating their exit from the previous week. ETFs are generally believed to represent the investment behavior of institutional investors, while mutual funds are thought to represent the retail investor. The split in behavior between institutional and retail investors could be due at least partly to market volatility, as markets search out a direction against an uncertain global backdrop, said Jeff Tjornehoj, head of Americas Research at Lipper. "Without any momentum, a (mutual) fund investor feels trapped in their decision. They're not buying intraday, they have to make a decision that will only be known tomorrow," Tjornehoj said. "ETF investors are more likely to jump in and jump out, and that's the nature of that vehicle." The S&P 500 gained 2.78 percent for the reporting week, driven in part by hopes that global policymakers would step in to boost struggling economies. Money market funds notched net outflows of $4.365 billion. Since mid-June, those funds have alternated weeks of net inflows and outflows. Taxable bond funds, something of a safe haven in the record low interest rate environment, saw a net entry of $3.41 billion, the fourth straight week of gains. Net buying of $401 million took corporate high-yield funds to net inflows for an eighth straight week. Investment grade corporate bond funds pulled in a net $733 million, a slight dip from recent weeks. Municipal bond funds saw net inflows of $504 million, a 16th straight week of net gains. Excluding ETFs, equity income funds pulled in a net $272 million, slightly more than last week. Net inflows rise to $388 million when ETFs are included. Equity income funds have been relatively consistent gainers over recent years, providing an alternative for yield-hungry investors balking at record low interest rates. 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 5.878 0.22 2,741.106 10,222 Domestic Equities 6.204 0.30 2,089.097 7,645 Non-Domestic Equities -0.326 -0.05 652.009 2,577 All Taxable Bond Funds 3.410 0.24 1,456.916 4,697 All Money Market Funds -4.365 -0.19 2,269.465 1,421 All Municipal Bond Funds 0.504 0.16 308.625 1,353 Link this Share this Digg this Email Reprints

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