July 5, 2012 / 10:05 PM / 8 years ago

Institutional investors rush to equity funds-Lipper

By Luciana Lopez
    NEW YORK, July 5 (Reuters) - Institutional investors poured
money into equity funds in the week ended July 4, dwarfing a
slight exit by retail investors, data from Thomson Reuters'
Lipper service showed on Thursday.
    Equity funds recorded net inflows of $10.356 billion, thanks
to $10.483 billion net buying of exchange-traded funds. Of that,
the lion's share - $7.029 billion - went to State Street's SPDR
S&P 500 ETF fund.   
    In contrast, excluding ETFs, retail investors pulled $127
million out of equity funds over the same time.
     ETFs are generally believed to represent the investment
behavior of institutional investors, while mutual funds are
thought to represent the retail investor. 
    "What it tells me is that although that headline number
seems somewhat good and maybe there's some positive sentiment
for risk in the market, it really doesn't seem like it's very
well spread across the board," said Matthew Lemieux, research
analyst at Lipper.
    "If you look at the mutual fund sector, it still seems very
flat," he said. 
    The Standard & Poor's 500 Index rose 3.17 percent
over the reporting period, including the index's best
three-session run since December.   
    The reporting period also comprised the end of the quarter
and the end of the first half of the year, Lemieux noted.
    The week in question contained one fewer day of data than
usual because of Wednesday's U.S. Independence Day holiday.
    Despite net gains in the previous week, money market funds
saw a net exit of $7.409 billion. These funds have seen losses
for much of the year.
    Taxable bond funds, something of a safe haven in the record
low interest rate environment, lost $104 million in the
reporting week, capping three weeks of gains. 
    But the split between institutional investors and retail
investors in such funds was sharp. 
    Excluding ETFs, taxable bond funds attracted a net $1.3
billion. It was the $1.41 billion in net outflows from ETFs that
tipped taxable bond funds into the red for the week.
    Corporate high-yield funds saw a fourth straight week of
inflows, with net buying of $779 million. Investment grade
corporate bond funds pulled in $124 million, down sharply from
the prior week's $1.1 billion net inflow.  
    Municipal bond funds had net inflows of $317 million. 
    Excluding ETFs, equity income funds pulled in a net $300
million, up steeply from the $53.2 million in the previous
reporting period. The figure rises to a net inflow of $387
million when ETFs are included. Equity income funds have
provided an alternative method of gaining returns for
yield-hungry investors shut out by record low interest rates.
    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     Count
                           ($Bil)    Assets  ($Bil)     
 All Equity Funds          10.356    0.39    2,773.930  10,289
 Domestic Equities         9.674     0.48    2,116.633  7,696
 Non-Domestic Equities     0.682     0.11    657.297    2,593
 All Taxable Bond Funds    -0.104    -0.01   1,438.274  4,683
 All Money Market Funds    -7.409    -0.35   2,092.555  1,401
 All Municipal Bond Funds  0.317     0.11    301.771    1,360
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