U.S.-based energy stock funds attract $829 million over week: Lipper

[December 05, 2014]  By Sam Forgione

NEW YORK (Reuters) - Investors in U.S.-based funds committed $829 million to funds that specialize in energy stocks in the week ended Dec. 3 on bargain-hunting after a plunge in oil prices dragged energy shares lower, data from Thomson Reuters' Lipper service showed on Thursday.

The inflows marked the second straight week of new demand for energy-sector stock funds, even as the S&P energy index <.SPNY> fell 3.2 percent over the reporting period after oil prices hit four-year lows.

"Investors think we're at the bottoms of this energy downfall," said Tom Roseen, head of research services at Lipper.

Stock funds overall attracted $1.6 billion in new cash, marking their sixth straight week of inflows. All of the new cash, at $5.9 billion, went into stock exchange-traded funds, while stock mutual funds posted $4.3 billion in outflows.

The outflows from stock mutual funds were the biggest since mid-December 2013. Mutual funds are commonly purchased by retail investors, while ETFs are thought to represent the behavior of institutional investors.

Japanese stock funds attracted just $86 million in new cash, but still showing the sixth straight week of inflows in the wake of unprecendented Bank of Japan stimulus and a delay in the country's planned sales tax hike.

Despite the appetite for energy shares, retail investors took profits in U.S. stocks after gains this year and parked money on the sidelines in money market funds, Roseen said.

The benchmark S&P 500 stock index, which has risen over 12 percent this year, rose just 0.1 percent over Lipper's reporting period. Low-risk money market funds attracted $19 billion, marking their biggest inflows since December 2013.

Taxable bond funds attracted $1.2 billion, marking their 11th straight week of inflows. Investors favored safety and pulled $859 million from riskier high-yield bond funds, marking their biggest outflows since early October.

"Investors are feeling pretty good that the dialing up of interest rates is not on speed-dial," Roseen said in reference to the Federal Reserve's first interest rate hike, which is expected to hurt bond prices.

The weekly Lipper fund flow data is compiled from reports issued by U.S.-domiciled mutual funds and exchange-traded funds.

(Reporting by Sam Forgione; Editing by Chris Reese and Jonathan Oatis)

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