January 12, 2017 / 10:51 PM / 6 months ago

UPDATE 1-U.S. investment-grade bond fund inflows biggest in nearly 2 years -Lipper

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(Adds analysts' quotes; Lipper table)
    By Sam Forgione and Jennifer Ablan
    NEW YORK, Jan 12 (Reuters) - Investors in U.S.-based funds
poured $4 billion into investment-grade corporate bond funds in
the week ended Jan. 11, marking the funds' biggest inflows since
early February 2015, data from Thomson Reuters' Lipper service
showed on Thursday. 
    Taxable bond funds overall attracted $3.9 billion in new
cash to mark their biggest inflows since late September. Stock
funds attracted $2.4 billion in inflows to mark their third
straight week of new demand. 
    The inflow into U.S.-based investment-grade corporate bond
funds marks the fourth such week of inflows, Lipper said.  
    "The relatively strong stability and income investment-grade
corporate bonds provide are particularly appealing amid the
uncertainty that has materialized to start the year," said Todd
Rosenbluth, director of ETF & Mutual Fund Research at CFRA.
    U.S.-based high-yield "junk" bonds also enjoyed another week
of investors hunting for yield. The group posted inflows of $564
million over the weekly period, the third straight week of
inflows, according to Lipper.
    Pat Keon, senior research analyst at Thomson Reuters Lipper,
noted that Loan Participation, also known as bank loan funds,
have enjoyed a good run since the presidential election: More
than $6.9 billion, including inflows of $795 million last week.
    "It is a favorable environment for bank loans at
U.S.-president-elect Donald Trump's promise of less regulation
will make it easier to loan money out and rising interest rates
favor them due to their floating rates," Keon said.
    For their part, U.S.-based stock funds attracted $2.4
billion in the week ended Wednesday, marking their third
straight week of inflows. That said, all of those inflows went
into popular exchange-traded funds: U.S. stock ETFs attracted
$3.3 billion of inflows over the weekly period, and U.S.-based
stock mutual funds posted $916 million of outflows.
    Overall, U.S.-based domestic-focused stock funds posted $386
million of cash withdrawals, their first outflows in three
weeks, while U.S.-based non-domestic-focused stock funds
attracted $2.8 billion inflows, their biggest since March 2016.
    U.S.-based money market funds posted $21.1 billion of
outflows over the weekly period, their biggest in three weeks,
Lipper said. U.S.-based Emerging Markets equity funds attracted
$582 million of new cash, their second straight week of inflows,
while U.S.-based Emerging Markets debt funds attracted $172
million over the weekly period, their second week of inflows.
    The following is a broad breakdown of the flows for the
week, including ETFs (in $ billions):
 Sector               Flow Chg   % Assets  Assets        Count
                      ($Bil)               ($Bil)        
 All Equity Funds     2.430      0.04      5,543.802     11,819
 Domestic Equities    -0.386     -0.01     3,978.984     8,440
 Non-Domestic         2.816      0.18      1,564.818     3,379
 Equities                                                
 All Taxable Bond     3.862      0.17      2,318.383     5,960
 Funds                                                   
 All Money Market     -21.088    -0.89     2,355.005     1,041
 Funds                                                   
 All Municipal Bond   0.974      0.27      368.486       1,407
 Funds                                                   
 
 (Reporting by Sam Forgione; Editing by Jennifer Ablan, Bernard
Orr)

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