Reuters: US Dollar Report: Investors close year with bets on stock ETFs -Lipper

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Investors close year with bets on stock ETFs -Lipper Dec 28th 2012, 04:07 Thu Dec 27, 2012 11:07pm EST By Sam Forgione NEW YORK, December 27(Reuters) - Investors in U.S.-based funds favored stock exchange-traded funds (ETFs) and emerging market equity mutual funds as the year wound down, data from Thomson Reuters' Lipper service showed on Thursday. It said in the week ended December 26, the last reporting period of the year, investors poured $2.53 billion into stock ETFs, the least in five weeks, but this was more than stock mutual funds, which attracted $508 million in new cash. The inflows into stock mutual funds, while modest, mark a turnaround for the funds which had seen outflows over the prior six weeks, including a massive $6.43 billion outflow over the previous reporting period. Inflows of $1.26 billion into mutual funds that hold non-U.S. stocks, mostly in emerging markets, offset outflows of $751 million from those that hold U.S. stocks, leading to the net inflow into stock mutual funds. Overall, stock ETFs and stock mutual funds combined attracted $3.03 billion over the period. "Emerging markets have continued to be a strong group for inflows regardless of market action," said Lipper analyst Matthew Lemieux. ETFs are generally believed to represent the investment behavior of institutional investors, while mutual funds are thought to represent the retail investor. Bond funds, meanwhile, attracted $936.3 million in inflows after outflows of $1.6 billion the prior week. Inflows of $1.81 billion into bond mutual funds offset outflows of $872.2 million from bond ETFs, resulting in the positive sum. For the year, bond funds attracted far more new cash than stock funds, with $297.3 billion flowing into funds that hold taxable bonds. Bond mutual funds attracted $255.8 billion of that sum, while bond ETFs pulled in the remaining $41.45 billion. Stock funds, by comparison, attracted just $13.56 billion in net new cash over the year despite the S&P 500's roughly 13 percent gain. The modest total inflow into stock funds was a result of bets on stock ETFs amounting to $100.9 billion, which offset outflows of $87.31 billion from stock mutual funds. The DoubleLine Total Return Bond Fund dominated the last weekly reporting period with inflows of $268.8 million, the most among all bond funds. Higher-quality investment-grade bond funds gained favor and attracted $712.5 million, while riskier high-yield bond funds suffered outflows of $354.9 million. Low-yielding money market funds pulled in $18.2 billion over the period after investors yanked $9 billion from the funds the prior week. Investment-grade bond funds "continue to be the highest preference for investors in times of concern," said Lemieux of Lipper. 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 3.033 0.10 2,884.881 9,983 Domestic Equities 0.161 0.01 2,137.985 7,400 Non-Domestic 2.872 0.38 746.896 2,583 Equities All Taxable Bond 0.936 0.06 1,504.746 4,748 Funds All Money Market 18.188 0.78 2,344.363 1,357 Funds All Municipal Bond -0.423 -0.13 317.584 1,337 Funds Link this Share this Digg this Email Reprints

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