December 27, 2018 / 11:16 PM / 4 months ago

UPDATE 1-U.S. stock funds attract cash for 1st time in 6 weeks -Lipper

 (Adds table, details on fund flows, byline,)
    By Trevor Hunnicutt
    NEW YORK, Dec 27 (Reuters) - U.S. fund investors eased into
wild stock markets during the latest week, adding $5.2 billion,
according to Lipper data on Thursday that reflected the first
net positive flows for funds since December's selloff began.
    Stock exchange-traded funds (ETFs) based in the United
States attracted $5.4 billion during the week ended Dec. 26,
while their mutual funds counterparts recorded a $173 million
withdrawal, the least pulled from those funds since June.
    Markets took a turn for the worse in December. While ETFs,
used heavily by institutional investors, have been stock buyers
in December, mutual fund investors typically used by retail
investors sucked out a record $86 billion.
    This week marked the first net positive result for stock
mutual funds and ETFs in the past six weeks, according to
Lipper, a research service.
    But there are still strong signals of risk aversion in stock
sectors and debt markets.
    Technology sector funds, a leader during this bull market
run but the victim of a steep selloff in recent weeks, recorded
withdrawals of $2.2 billion, the most since early 2015, Lipper
data showed. The S&P 500 Information Technology sector
is down 18 percent over the past three months, including
reinvested dividends.
    Financial sector funds are seen hurting in a declining
economy or one in which short-term rates heavily influenced by
the Federal Reserve rise too high. Over the most recent week,
investors pulled $1.7 billion, bringing withdrawals for the
quarter to $8.7 billion, the most on record.
    A category tracked by Lipper that includes leveraged loans
posted $3.5 billion in withdrawals, the most on record and
nearly 4 percent of the assets in those funds. In recent weeks
the category has been struck both by concerns about the high
levels of debt taken on by U.S. corporations and the possibility
that the Federal Reserve might slow its rate hikes and diminish
the value of loans that pay more as rates rise. High-yield and
corporate investment-grade bond funds also recorded
multi-billion dollar withdrawals.
    The end-of-year activity within funds has been elevated as
investors rotate out of mutual funds in an effort to limit their
taxes or reposition for the new year. The data can also be
distorted by capital gains distributions.
    The market volatility is making cash king for now. Treasury
funds attracted $4.2 billion during the week, the most since
February 2015, and money-market funds gathered $33 billion.
    The following is a breakdown of the flows for the week,
including mutual funds and ETFs:
 Sector                    Flow Chg  % Assets  Assets     Count
                           ($blns)             ($blns)    
 All Equity Funds          5.195     0.08      6,381.246  12,123
 -Domestic Equities        9.817     0.21      4,515.485  8,610
 -Non-Domestic Equities    -4.622    -0.24     1,865.760  3,513
 All Taxable Bond Funds    -9.229    -0.34     2,695.476  5,974
 All Money Market Funds    33.128    1.15      2,903.159  1,001
 All Municipal Bond Funds  0.931     0.22      427.177    1,413
 
 (Reporting by Trevor ; Editing by Dan Grebler)
  
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