UPDATE 2-US equity funds net $7.7 bln in latest week-Lipper
* U.S. focused equity fund net inflows $3.6 bln
* Non-domestic equity fund net inflows $4.1 bln
* iShares MSCI EM equity ETF (EEM) net inflow $1.65 bln
* U.S. municipal bond fund outflows rise to net $1.15 bln (Updates with a graphic of muni bond fund outflows)
By Daniel Bases
NEW YORK, April 7 (Reuters) - U.S.-domiciled equity funds took in a net $7.73 billion in the week ended April 6, with a large share of the cash moving into emerging market stocks, data from Lipper showed on Thursday.
Municipal bond funds, however, saw outflows of cash increase to a one-month high of $1.15 billion, with a near threefold increase over the prior week. This brings the streak of outflows to 21 weeks for a total of $30.7 billion.
For a graphic showing net inflows/outflows and total assets under management of, click on r.reuters.com/fet88r
For emerging market equities, the net inflow of $2.7 billion in fresh cash was the fourth-largest weekly tally since Lipper started keeping records in 1992.
The big influence in this sector was the $1.65 billion inflow of cash to the iShares MSCI Emerging Market exchange traded fund (EEM).
"I think it is an example of people willing to take a bit more risk given the upward momentum," said Jeff Tjornehoj, senior research analyst at Lipper.
"We're also seeing inflows back into technology funds. They had three weeks of outflows and now two weeks inflows. Not a lot of money, but better than in the past and another example of investors willing to stay in the market long enough to appreciate some gains.
Technology funds took in $70.2 million for the week, a modest increase over the prior period.
While the overall picture for the week was positive for the equity funds, there was a sizable $1.93 billion pulled from the SPDR S&P 500 ETF (SPY).
"It was a very good week for flows considering all the distractions investors have to deal with. It showed discipline among investors overall. The growth/value large-cap sector has had outflows for a number of weeks. People are just more comfortable with small-caps in general," Tjornehoj said.
Among the major equity classifications, only the large-cap sector suffered net redemptions -- $1.63 billion. Small-cap funds took in $56 million.
Non-domestic equities, overall, took in $4.1 billion in new cash, outpacing the net inflow of $3.6 billion for U.S.-focused equity funds.
Even as Japan struggles to come to grips with its post-earthquake nuclear crisis, investors still put money into Japanese focused equities, albeit at a much slower pace. A major aftershock hit Japan on Thursday, reigniting fears over the nuclear power crisis.
In the latest report, Japan-focused equity funds took in a net $75.7 million, well off the $286 million in the prior week and the record inflow just after the March 11 earthquake.
"I think a lot of people were done with that. They squeezed the short-term profit out of the Japanese equity trade," he said.
Gold and precious metals funds had the second best week in the past 12 months. The sector had net inflows of $675 million for the week ended Wednesday, during which time spot gold prices XAU= rose to a record high of $1461.91 an ounce. They have since extended that record.
Money flowed across the asset classes with taxable bond funds posting a healthy inflow of $5.13 billion, up from the prior week's net inflow of $3.9 billion. Taxable bond funds have had steady inflows since mid-December even as stock markets have rallied from a mid-March dip back up to their best levels since mid-2008.
While corporate high-quality bond funds had net outflows of $115 million, the investment grade, high yield and flexible funds each took in over $1 billion in net new cash
"People have not given up on corporate debt. They have misgivings about the state of the U.S. Treasury or statements by the (U.S. Federal Reserve). But they do trust corporations have their balance sheets appropriately set and find the risk/reward commensurate with that posture," said Tjornehoj.
"I think this is still more follow through of the scars of 2008/2009 where investors stopped trusting equities and put cash into bonds. They are not willing to change that perception so quickly. These scars are deep for a lot of people close to retirement and they won't reengage with equites," he said.
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 Change Total Share
Change in Assets Assets Class
(pct) Count ============================================================== All Equity Funds 7.733 0.28 2,837.016 10,044 - Domestic Equities 3.596 0.17 2,097.898 7,643 - Non-Domestic Equities 4.136 0.57 739.118 2,401 All Taxable Bond Funds 5.130 0.40 1,294.399 4,026 All Money Market Funds 2.985 0.13 2,339.273 1,515 All Municipal Bond Funds -1.148 -0.37 309.480 1,577
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