(Adds quotes from head of research services at Thomson Reuters
By Sam Forgione and Jennifer Ablan
NEW YORK, Sept 22 Investors poured $1 billion
into U.S. Treasury funds in the week ended Sept. 21, the funds'
biggest inflows since mid-February, as the Federal Reserve left
interest rates unchanged, data from Thomson Reuters' Lipper
service showed on Thursday.
Investors also committed $758 million to international and
global debt funds, the funds' biggest inflows since late July.
Treasury funds and other taxable portfolios benefited from
the Fed's decision this week.
"Fed held pat with no interest rate hikes - providing at
least a short reprieve from normalizing interest rates - and
there was some concern this week with economics: August retail
sales declined for the first month in five and that weekly
jobless claims rose slightly to 260,000," said Tom Roseen, head
of research services at Thomson Reuters Lipper.
Overall, U.S.-based taxable bond funds attracted $5 billion
of inflows over the weekly period, their biggest inflow in six
weeks, Lipper data show.
Stock funds posted $3.4 billion in outflows, their fifth
straight week of investor withdrawals. Within that category,
U.S.-based stock mutual funds posted $2.1 billion of cash
withdrawals and stock ETFs posted $1.4 billion of net outflows.
"I think that equity investors are now focused on earnings
season, which is just around the corner," Roseen said. "No
pressure on interest rates, so yields aren't rising - bond
prices aren't dropping. This was a quasi-good sign for
fixed-income investors...although rate hikes are just around the
corner or so they seem."
On Wednesday, the Fed signaled that it will likely raise
rates just once before year's end. It said in a statement that
the U.S. job market has continued to strengthen and economic
activity has picked up. But it noted that business investment
remains soft and inflation too low and that it wants to see
further improvement in the job market.
Investors also put money to work at into higher-quality
fixed-income funds. U.S. investment-grade corporate bond funds
attracted $2.1 billion of inflows, their 12th straight week of
inflows, while junk bond funds posted $274 million of outflows.
U.S. money-market funds posted $17.1 billion of outflows
over the weekly period, the sector's fourth straight week of
outflows, Lipper said.
Appetite for shares overseas plunged.
U.S.-based funds that invest in Japanese stocks posted $62
million of outflows over the weekly period, their eighth
straight week of cash withdrawals. U.S.-based European stock
funds posted $751 million of outflows, extending their outflow
streak since early June.
The following is a broad breakdown of the flows for the
week, including ETFs:
Sector Flow Chg % Assets ($Bil) Count
All Equity Funds -3.412 -0.07 5,332.913 11,971
Domestic Equities -2.357 -0.06 3,748.816 8,533
Non-Domestic -1.055 -0.07 1,584.098 3,438
All Taxable Bond 5.029 0.22 2,314.968 6,026
All Money Market -17.097 -0.73 2,311.066 1,038
All Municipal Bond 0.518 0.13 394.556 1,405
(Reporting by Sam Forgione and Jennifer Ablan; Editing by
Leslie Adler and Diane Craft)