June 15, 2017 / 11:41 PM / 5 months ago

UPDATE 1-U.S. stock ETF inflows balloon to largest of 2017: Lipper

 (Adds details on mutual funds and ETFs, analyst quote, table,
    By Trevor Hunnicutt
    NEW YORK, June 15 (Reuters) - Investors raced into
U.S.-based, stock exchange-traded funds this past week despite
market jitters, delivering the most cash to those funds since
late last year, Lipper data showed on Thursday.
    Stock ETFs listed in the United States attracted $17.7
billion during the week ended June 14, according to the research
service, while their mutual fund counterparts recorded $6.8
billion of outflows in their largest week of withdrawals since
    Mutual funds are heavily favored by retail investors, while
ETFs draw an increasingly diverse set of clients, including
fast-trading hedge funds.
    The result came as investors grappled with pressure on oil
prices, soft economic data and an interest-rate hike by the U.S.
Federal Reserve, the second rate hike this year.
    "Mom and pop are easily scared: they've been hearing about
the market meltdown, and it's overvalued, and it's time to sell,
cash is your friend - stuff like that," said Tom Roseen, head of
research services at Thomson Reuters' Lipper unit.
    "On the flip side, there was really no reason for the
    Taxable bond funds, an ostensibly safer alternative to
stocks, managed to pull in $3.5 billion. Yet thanks to ETF
buyers, domestic-focused stock funds pulled in $11.4 billion,
the most since February.
    The selloff was "overplayed," said Roseen, adding that "some
people saw it as a buying opportunity."
    A massive rotation out of technology shares, such as the
so-called FANG stocks - Facebook Inc, Amazon.com Inc
, Netflix Inc and Google-parent Alphabet Inc
 - and into beaten-down sectors, including financials,
that began last Friday and resumed this week.
    U.S.-based financial sector funds pulled in $2.3 billion,
the most since November, as the Fed hiked rates in a boon for
bank lending rates.
    But technology sector stocks posted $444 million in
withdrawals during the week, the most since September, according
to the research service.
    Tech stocks took over as the leaders of the ongoing stock
rally as market segments popular in the immediate aftermath of
U.S. President Donald Trump's November election, such as
financials and small-company stocks, faltered earlier this year.
    Now by contrast, the Financial Select Sector SPDR Fund
 is on course to deliver higher one-month returns for
June than the tech-heavy PowerShares QQQ ETF for the
first time since February. 
    The following is a breakdown of the flows for the week,
including mutual funds and exchange-traded funds:
 Sector                    Flow      Pct of    Assets     Count
                           Change    Assets    ($ blns)   
                           ($ blns)                       
 All Equity Funds           10.920    0.18     5,948.475  11,418
 Domestic Equities          11.359    0.27     4,161.338   8,179
 Non-Domestic Equities      -0.438   -0.02     1,787.136   3,239
 All Taxable Bond Funds      3.455    0.14     2,442.610   5,765
 All Money Market Funds    -15.652   -0.65     2,399.390   1,070
 All Municipal Bond Funds    0.395    0.10      386.396    1,392
 (Reporting by Trevor Hunnicutt; Editing by Jennifer Ablan)

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