October 12, 2017 / 10:21 PM / a year ago

UPDATE 1-U.S. domestic stock funds win cash for first time in six weeks -Lipper

 (Adds details on mutual funds and ETFs, economist quote, table,
    By Trevor Hunnicutt
    NEW YORK, Oct 12 (Reuters) - U.S. fund investors stopped
resisting the festive mood in equity markets and joined the
party, pouring cash into domestic stocks for the first time in
six weeks, according to Lipper data on Thursday.
    Stock mutual and exchange-traded funds in the United States
pulled in $2.9 billion in the week ended Oct. 11, the most since
August, according to the research service. Of that, $425 million
went to domestic stocks.
    High-yield bond funds, another category of investment seen
as speculative, pulled in $967 million in its largest week of
inflows since July, Lipper said.
    The results are a tepid endorsement, but one nonetheless, of
a rally that fund investors have treated cautiously.
    Domestic equity funds tracked by Lipper posted $46 billion
in withdrawals from July through September, the second straight
quarter of outflows, even as the S&P 500 booked a 4.5
percent total return.
    "The market is ahead of the economy," said Milton Ezrati,
chief economist at Vested, a financial communications company,
saying gains have come in anticipation of earnings growth and
U.S. tax reform that have not yet been secured.
    "We have not gotten good policy so unless the economy
confirms where the market has been, we will have a correction."
    Quarterly earnings results are starting to trickle in,
including reports on Thursday from Citigroup Inc and
JPMorgan Chase & Co. Shares of both banks fell on the
    The appeal of domestic stocks did not diminish demand for
bonds and international stocks. Taxable bond funds attracted
another $3.5 billion, while non-domestic equities pulled in $2.4
billion, the data showed.
    Japanese stock funds broke their streak of outflows, winning
$237 million in new cash, the first week of net inflows since
July, according to Lipper.
    The following is a breakdown of the flows for the week,
including mutual funds and ETFs:
 Sector                    Flow Chg  % Assets  Assets     Count
                           ($blns)             ($blns)    
 All Equity Funds          2.867     0.04      6,495.100  12,169
 Domestic Equities         0.425     0.01      4,441.435  8,661
 Non-Domestic Equities     2.442     0.12      2,053.665  3,508
 All Taxable Bond Funds    3.472     0.13      2,585.725  6,073
 All Money Market Funds    0.464     0.02      2,591.322  1,075
 All Municipal Bond Funds  0.044     0.01      398.254    1,470
 (Reporting by Trevor Hunnicutt; Editing by Jennifer Ablan and
Chris Reese)
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