U.S.-based stock funds attract $6.1 billion over week: Lipper

[August 29, 2014]  By Sam Forgione 

NEW YORK (Reuters) - Investors in U.S.-based funds poured $6.1 billion into stock funds and $672 million into high-yield bond funds in the week ended Aug. 27 on continued appetite for risk assets, data from Thomson Reuters' Lipper service showed on Thursday.

The inflows into stock and high-yield bond funds, while down from the previous week, marked the third straight week of new demand for both fund categories. Taxable bond funds overall attracted $3 billion, also marking their third straight week of inflows.

Stock mutual funds, which are commonly purchased by retail investors, attracted $415 million. Stock exchange-traded funds, which are thought to represent the behavior of institutional investors, attracted $5.7 billion.

The inflows showed investors continuing to inch back into riskier assets such as stocks and lower-rated junk bonds after hefty withdrawals from funds that hold those assets over the first week of August.

"Risk appetite has gradually come back," said Barry Fennell, senior research analyst at Lipper. He cited continued low interest rates and strong U.S. economic data over the period.

Emerging market equity funds attracted $951 million in new cash, marking their ninth straight week of inflows. European stock funds posted about $179 million in outflows, despite speculation for more European Central Bank stimulus.

Fennell of Lipper said geopolitical concerns surrounding Ukraine and Russia hindered overall demand for European equities.

Risk assets rose over the period. The U.S. benchmark S&P 500 stock index rose 0.7 percent and closed above the 2,000 milestone for the first time. The Barclays U.S. Corporate High Yield Index rose a slight 0.2 percent.

Funds that hold floating-rate loans, which are protected from rising interest rates, posted $298 million in outflows, marking their seventh straight week of withdrawals. Analysts have cited concerns of overvaluation as a cause for the outflows.

Investors still parked $13.3 billion into low-risk money market funds, marking their biggest inflows in seven weeks and their fourth straight week of new money.

Investors showed less appetite for safe-haven gold. Commodities and precious metals funds, which mainly invest in gold futures, posted about $229 million in outflows, marking their biggest outflows since late April.

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 Lisa Shumaker)

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