UPDATE 1-US taxable bond funds see record net $10.7 bln inflows -Lipper

Fri Feb 7, 2014 4:54am IST

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By Luciana Lopez
    NEW YORK, Feb 6 (Reuters) - Investors in funds based in the
United States poured a record net $10.7 billion into taxable
bond funds in the week ended Feb. 5, while exchange-traded funds
saw large outflows from stock funds, data from Thomson Reuters'
Lipper service showed on Thursday.
    Investors took a net $22.4 billion out of equity ETFs, but
equity mutual funds took in a net $1.5 billion, according to
Lipper. Among the hardest-hit ETFs was the SPDR S&P 500 ETF
, which had a net outflow of $10.744 billion.
    The overall figures underscore investor nervousness at the
start of this year. 
    After the Standard & Poor's 500 jumped nearly 30
percent last year, the index is down 4 percent so far in 2014.
The S&P lost 1.27 percent over the week reported in the Lipper
data.
    With the Federal Reserve pulling back on its massive
bond-buying program and mixed economic data in the United
States, investors are worried about global growth.
    "Investors at the margin are starting to wonder if they're
still on the right track, but no one has hit the panic button,"
said Jeff Tjornehoj, head of Lipper Americas Research.
    Investors in exchange-traded funds are thought to represent
the institutional investor, including hedge funds. Mutual funds
are thought to represent retail investors.
    In a highlight of the market's mood, trading volume in CBOE
Volatility index VIX futures hit an all-time high in
January, suggesting investors were busy buying protection
against a market decline. The VIX futures trading volume totaled
a record 4.40 million contacts in January, a 52 percent increase
from a year ago and a 38 percent increase from December, the
Chicago Board Options Exchange said on Monday.
    Political turmoil in emerging markets hasn't helped, either,
leaving many investors uncertain about where the year could go.
    A sharp slide in emerging market stocks and currencies in
recent sessions has caused retail investors to big-name fund
managers to worry about the developing world. 
    Emerging market equity funds saw net outflows of $2.7
billion in the latest week, their largest such outflows since
February 2011. U.S.-based emerging market bond funds posted a
net outflow of $331 million.
    Even developed markets were not immune. U.S.-based Japanese
equity funds saw a net exit of $386 million, the first such
outflow of the year. 
    Japan's Nikkei stock average fell to a four-month low during
the Lipper reporting week as the yen strengthened and investors
fretted about the prospects for exporters. 
    U.S-based money market funds attracted a net $5.773 billion,
nearly reversing $5.8 billion in net outflows in the previous
week.  
    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 Chg    % Assets   Assets       Count
                     ($Bil)                 ($Bil)       
 All Equity Funds    -20.905     -0.55      3,698.938    10,602
 Domestic Equities   -18.844     -0.67      2,763.169    7,792
 Non-Domestic        -2.060      -0.22      935.768      2,810
 Equities                                                
 All Taxable Bond    10.692      0.64       1,671.333    5,301
 Funds                                                   
 All Money Market    5.773       0.24       2,384.839    1,316
 Funds                                                   
 All Municipal Bond  -0.227      -0.08      276.782      1,407
 Funds
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