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Equity fund outflows return, bonds gain cash-Lipper

by on May 10, 2012 9:21 pm BST
 

Thu May 10, 2012 5:21pm EDT

By Daniel Bases	
    NEW YORK, May 10 (Reuters) - Investors pulled cash from U.S.
domiciled equity mutual funds in the week ended May 9,
reflecting market anxiety that Europe might reverse course from
austerity measures after voters rejected politicians who pushed
through spending cuts.	
    Elections in France and Greece favored politicians who
opposed severe austerity measures put in place to lower overall
sovereign indebtedness. Those measures have led to job losses
and reduced government services, fueling populist backlashes.	
    According to Thomson Reuters' Lipper data on Thursday,
equity mutual funds had net outflows of $6.5 billion versus a
net inflow of $3.9 billion in the prior period.	
    In the course of the reporting week, the U.S. benchmark
Standard & Poor's 500 stock index fell 3.40 percent, a
sharp drop that left it at a two month low.	
    However, when exchange traded funds were excluded from the
mix, equity funds had a modest net inflow of $77 million. ETFs
are anecdotally thought to reflect the behavior of institutions
and professional investors.	
    Taxable bond funds pulled in a net $4.6 billion while money
market funds had net inflows of $4.4 billion.	
    The cash for fixed income moved into the higher quality
corporate investment grade funds. In the latest week this sector
pulled in a net $1.26 billion, far outpacing other categories.
High yield bond funds had net inflows of $754 million.	
    Emerging market debt funds pulled in a net $218 million
although emerging market equities suffered net outflows of
nearly $1 billion.    	
    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          -6.466     -0.23   2,744.922  10,337
 Domestic Equities         -5.440     -0.25   2,085.760  7,756
 Non-Domestic Equities     -1.026     -0.15   659.162    2,581
 All Taxable Bond Funds    4.630      0.33    1,411.662  4,615
 All Money Market Funds    4.376      0.19    2,269.701  1,409
 All Municipal Bond Funds  0.901      0.31    296.665    1,354