Reuters: US Dollar Report: US bond funds see outflows after 20-week streak -Lipper

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US bond funds see outflows after 20-week streak -Lipper Nov 2nd 2012, 01:26 Thu Nov 1, 2012 9:26pm EDT By Sam Forgione NEW YORK, Nov. 1 (Reuters) - U.S.-based bond mutual funds saw outflows of funds in the week ending Oct 31, the first time since mid-June, data from Thomson Reuters' Lipper service showed on Thursday. Taxable bond mutual funds had outflows of $895.11 million in the week ended Oct 31, the first in 21 weeks and following inflows of $3.65 billion the previous week. Taxable bond exchange-traded funds, meanwhile, had inflows of $300.9 million. ETFs are generally believed to represent the investment behavior of institutional investors, while mutual funds are thought to represent the retail investor. Overall, bond mutual funds and ETFs combined had net outflows of $594.21 million, the first time the funds together have surrendered investor assets in 17 weeks. Investors also avoided stock mutual funds. They had outflows of $1.36 billion after small outflows of $200.6 million the prior week. Stock ETFs, however, attracted institutional investors for the first time in three weeks with $1.33 billion in new assets. The SPDR S&P 500 ETF fund accounted for most of the inflows and took in $1.07 billion in new cash. The stock ETF inflows "would favor the idea that there were some institutional buyers out there that were buying on the dips," said Tom Roseen, head of research services at Lipper. Roseen said institutional investors may have taken money out of the funds in order to pay a corporate excise tax due at the end of October. Municipal bond funds, which benefit from not being taxed, had net outflows of $122.83 million, the first outflows for the funds since April. "The exclusion of municipal debt funds from taxation is on the cutting board," said Roseen, who said that presidential candidates Barack Obama and Mitt Romney's potential moves to tax the bonds may have driven away demand. Money market funds, which are known for being a safe cash stow-away but offer low yields, had net outflows of $23.53 billion, the most since August of last year. 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 Assets ($Bil) Count All Equity Funds -0.037 -0.00 2,833.942 10,009 Domestic Equities -0.718 -0.03 2,132.953 7,407 Non-Domestic 0.680 0.10 700.989 2,602 Equities All Taxable Bond -0.594 -0.04 1,478.494 4,602 Funds All Money Market -23.531 -1.03 2,260.483 1,379 Funds All Municipal Bond -0.123 -0.04 316.795 1,338 Funds Link this Share this Digg this Email Reprints

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