Reuters: US Dollar Report: US stock mutual funds suffer biggest outflows this year -Lipper

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US stock mutual funds suffer biggest outflows this year -Lipper Dec 7th 2012, 00:37 Thu Dec 6, 2012 7:37pm EST By Sam Forgione NEW YORK, Dec 6 (Reuters) - Investors in U.S.-based funds pulled the most money out of stock mutual funds this year in the past week, possibly out of concern that taxes on capital gains could rise in 2013, data from Thomson Reuters' Lipper service showed on Thursday. Stock mutual funds suffered outflows of $4.14 billion in the week ended Dec. 5, the most since December of last year. Stock ETFs, however, raked in $7.69 billion in new cash, with the SPDR S&P 500 ETF fund topping demand with inflows of $3.18 billion. Retail investors are concerned about the prospect of higher taxes on capital gains and could be taking profits from stock mutual funds, said Lipper analyst Matthew Lemieux. Investors in ETFs, meanwhile, "don't seem to have the same concerns as mutual fund investors," said Lemieux. Overall, stock funds had net inflows of $3.55 billion, less than half the previous week's inflows of $7.38 billion. ETFs are generally believed to represent the investment behavior of institutional investors, while mutual funds are thought to represent the retail investor. Bond funds had inflows of $1.18 billion, modestly trailing the previous week's inflows of $1.81 billion. Aside from a meager $8.2 million into bond ETFs, all of the inflows were into bond mutual funds. The benchmark S&P 500 index fell 0.33 percent over the reporting period as negotiations between U.S. President Barack Obama and Congress over the looming "fiscal cliff" of roughly $600 billion in tax increases and spending cuts continued. Toward the end of the reporting period, President Obama told Bloomberg Television that a Republican proposal to resolve the crisis was "out of balance" and said any deal must include a rise in income tax rates on the wealthiest Americans. Despite negative reactions in the stock market, investors showed greater appetite for risk in high-yield corporate bonds and invested $653.2 million into funds that hold the bonds, above the $532.9 million invested in higher-quality investment-grade corporate bond funds. Funds that hold safe-haven U.S. Treasuries, meanwhile, had outflows of $320.26 million, the most since late October. Investors also parked a massive $29.7 billion in low-risk money-market funds. Investors may be aiming for extra yield before the end of the year, while also using money market funds as a way to store cash, said Lemieux. 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 Count ($Bil) ($Bil) All Equity Funds 3.554 0.13 2,861.014 10,045 Domestic Equities 2.477 0.12 2,136.817 7,446 Non-Domestic Equities 1.077 0.15 724.197 2,599 All Taxable Bond Funds 1.188 0.08 1,505.007 4,704 All Money Market Funds 29.702 1.28 2,358.373 1,388 All Municipal Bond Funds 0.489 0.15 324.993 1,342 Link this Share this Digg this Email Reprints

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