U.S.-based gold funds attract most money since February: Lipper

[July 08, 2016]  By Trevor Hunnicutt

NEW YORK (Reuters) - Investors poured the most money into U.S.-based funds invested in precious metals since February, adding $2 billion to these funds in the latest week, data from Thomson Reuters' Lipper service showed on Thursday.

Fund investors bid up gold and other precious metals prices during the seven-day period ended July 6 as markets took cover following Britain's June 23 vote to exit the European Union, a process often referred to as Brexit.

SPDR Gold Shares was especially popular, taking in $1.4 billion over the week.

"Investors had been down on gold for such a long period of time," said Tom Roseen, Lipper's head of research services.

Now the metal is a top performer. Precious metals funds posted strong gains in four of the past five weeks, rising more than 4 percent over the most recent week Lipper measured.

The latest week marks the 10th straight week of inflows for gold funds.

Safe-haven U.S. Treasury funds also reeled in $864 million, their third straight week of inflows, according to Lipper.

Investors pulled $1.3 billion from financial-sector funds during the same week - the largest outflows since the week ended July 15, 2015 - as yields on long-term U.S. Treasury debt sank to record lows.

Bank revenues are curbed by persistently low rates.

Emerging markets, by contrast, have been helped by central bankers' loose monetary policy, their distance from the European drama, healthy yields and a rebound in oil prices this year. Emerging-market debt funds took in $481 million, their largest inflows since early March, Lipper said. Taxable bond funds took in $4.1 billion, following strong weeks for corporate-debt funds.

Stock funds posted $1.4 billion in outflows. The optimism of exchange-traded fund investors that the Brexit vote might not derail stocks was nonetheless overwhelmed by a long-running trend of withdrawals from stock mutual funds.

U.S.-based stock mutual funds posted $6.1 billion in outflows in the latest week, their 17th week of cash withdrawals, according to Lipper data.

Stock ETFs took in $4.6 billion in the latest week ended Wednesday, according to the data.

"The flight to safety was a bit mixed," said Roseen. Some people, he said, "have finally breathed a sigh of relief that Brexit was not as bad as they anticipated."

Funds focused on domestic shares took in $1.5 billion, breaking a streak of outflows that lasted nine consecutive weeks. Funds focused on international stocks posted $2.9 billion in outflows.

European stock funds posted $1.4 billion in outflows during the week, their largest withdrawals in Lipper's database since May.

Low-risk money market funds posted $34 billion in outflows after $25 billion inflows the week prior, which Roseen said could be attributed to end-of-quarter cash movements by investors.

(Reporting by Trevor Hunnicutt; editing by Jennifer Ablan and Diane Craft)

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