Investors pull money from junk bonds; move into cash: Lipper

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[April 01, 2016]  By Trevor Hunnicutt

NEW YORK (Reuters) - Risk aversion was on display in funds this week as investors poured $12.1 billion into U.S.-based money market funds and $112 million into U.S.-based corporate investment-grade bond funds with riskier junk bond funds posting withdrawals, Lipper data showed on Thursday.

The shift came as U.S.-based stock mutual funds posted $4 billion in outflows and U.S.-based taxable bond mutual funds $596 million in withdrawals for the week ended March 30, Lipper said.

High-yield junk bond funds posted $545 million in outflows during the week after six consecutive weeks of inflows totaling over $13.4 billion, Lipper said.

"We've had seven straight weeks of positive performance in U.S. indices," said Lipper research analyst Pat Keon, noting that some investors may just be socking away profits as others trim their risk. "We're going to continue to see risk-on. This is just a little bit of an aberration."

The week ended streaks of inflows for several fund categories.

U.S.-based emerging-market stock funds, for instance, posted $73 million in outflows just one week after hauling in $3 billion, their third-greatest week of deposits since Lipper record keeping began a quarter century ago.

Precious metals commodities funds posted $346 million in outflows after eleven straight weeks of positive flows that have brought the funds $8.9 billion in all.

"It was different this week from a long-term trend," said Keon. "The long-term trend has been money leaving domestic and going into non-domestic (stock funds), and this week we saw money leaving both."

Overall, stock funds in the United States posted $2.6 billion in outflows a week after taking in $2 billion. Domestic-focused funds posted $2.2 billion in outflows, while international-focused funds posted $411 million in outflows. U.S.-based taxable bond funds, posted $1.5 billion in outflows after nine straight weeks of inflows, Lipper said.

Treasury bond funds posted $1.4 billion in outflows during the week, the fifth straight week of outflows, according to the fund research service.

(Reporting by Trevor Hunnicutt; Editing by Jennifer Alban, Leslie Adler and Diane Craft)

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