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UPDATE 1-Investors flee to safe-haven assets on heightened geopolitical risks
April 13, 2017 / 11:28 PM / 8 months ago

UPDATE 1-Investors flee to safe-haven assets on heightened geopolitical risks

 (Adds quotes from head of research at Lipper)
    By Sam Forgione and Jennifer Ablan
    NEW YORK, April 13 (Reuters) - Investors' risk aversion was
on display this week as geopolitical tensions sent new money
into safe-haven assets such as government-Treasury as well as
gold funds, Lipper data revealed on Thursday.  
    Taxable bond funds attracted $1 billion in new cash to mark
their fourth straight week of inflows, with $396 million going
into U.S.-based government-Treasury funds, Lipper data in the
seven days through April 12 showed. 
    U.S.-based corporate investment-grade bond funds attracted
$96 million in the latest week, continuing their inflow streak
since December, according to Lipper. 
    For their part, non-taxable U.S. municipal bond funds
attracted $1.6 billion for the reporting period, the strongest
weekly flows since the week ended Dec. 30, 2013, Lipper added. 
    "Investors are questioning whether the market has gotten a
little ahead of itself against the geopolitical risks and
concerns with North Korea and Syria and China's Xi Jinping
visit," said Tom Roseen, head of research services at Thomson
Reuters Lipper. "Treasuries and munis are just a safe-haven
play, with the 10-year yield getting pushed down as these
safe-haven plays rallied. Interestingly though, munis got a big
boost...maybe because its tax season." 
    U.S.-based stock mutual funds posted cash withdrawals of
$1.2 billion, their third consecutive week of outflows, while
U.S.-based stock ETFs saw inflows of $2.5 billion, Lipper said. 
    Investors in exchange-traded funds are thought to represent
the institutional investor, including hedge funds. Mutual funds
are thought to represent retail investors.
    All told, Roseen said notable this week is "the big net
inflows" into international equity funds totaling $4 billion
-the largest inflows since Dec. 30, 2015.  
    Roseen said the European Central Bank did not plan on hiking
rates soon and "oil got a little boost from supply concerns
after the Syrian air strike. I would have thought the upcoming
French elections would have caused people to take a wait-and-see
    That said, investors hedge positions with gold, given
geopolitical worries. U.S.-based commodities precious metal
funds, which consists of gold futures, posted inflows of $295
million, their second consecutive week for the group, Lipper
data showed.  
    The following is a broad breakdown of the flows for the
week, including mutual funds and exchange-traded funds:
 Sector            Flow Chg       %       Assets ($Bil)  Count
                   ($Bil)         Assets                 
 All Equity Funds  1.378          0.02    5,723.560      11,618
 Domestic          -2.402         -0.06   4,054.624      8,309
 Non-Domestic      3.780          0.23    1,668.936      3,309
 All Taxable Bond  1.022          0.04    2,378.526      5,854
 All Money Market  -2.578         -0.11   2,316.295      1,016
 All Municipal     1.628          0.44    373.776        1,396
 Bond Funds                                              
 (Reporting by Sam Forgione and Jennifer ABlan; Editing by Dan
Grebler and Lisa Shumaker)

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