May 23, 2019 / 9:37 PM / a month ago

UPDATE 2-U.S.-based investment-grade bond funds end weekly inflows streak -Lipper

 (Adds inflow figures for money market and government funds,
table)
    By Jennifer Ablan
    May 23 (Reuters) - U.S.-based investment-grade corporate
bond funds posted their first weekly outflow since mid-January
as the United States and China continued to clash over trade,
souring sentiment across financial markets.
    According to Refinitiv's Lipper research service data on
Thursday, U.S.-based investment-grade corporate bond funds
posted outflows of $756 million in the week ended Wednesday. 
    "The outflows from investment-grade corporate bond funds did
surprise me but almost all of these outflows came from one peer
group, corporate-debt funds BBB-rated," Pat Keon, senior
research analyst at Lipper said. 
    Keon said within the BBB-rated group - which generally
contains funds with maturities greater than 10 years - iShares
iBoxx $ Investment Grade Corporate Bond ETF accounted for the
majority of the net outflows.
    For the short to intermediate-term peer groups, Lipper's
Keon continues to see net inflows in the latest week, which
means the overall results were "more of an aberration and not a
reversal of the long-term trend." 
    For U.S. equity funds, all of the net inflows came from
exchange-traded funds (ETFs) as they were up plus-$5 billion
while mutual funds lost $2.3 billion, Keon noted. 
    Two large-cap ETF products were responsible for $3 billion
alone - the SPDR S&P 500 ETF, which attracted more than
$2.1 billion, and the iShares Core S&P 500 ETF, which
attracted over $892 million, Keon said.
    Investors sought shelter in safer money market and
government-Treasury funds.  
    U.S.-based money-market funds attracted $28.4 billion in the
week ended Wednesday, their fifth consecutive week of inflows,
according to Lipper data. 
    "I believe the net inflows into money markets again
represents the uncertainty in markets due to the U.S.-China
trade war," Keon said.
    U.S.-based government-Treasury funds attracted $400 million
in the latest week, their second straight week of inflows.
    The United States and China had a heated exchange on
Thursday, with U.S. Secretary of State Mike Pompeo accusing
Chinese telecom giant Huawei Technologies Co Ltd          of
lying about its ties to the government and Beijing saying
Washington must end its “wrong actions” if it wanted trade talks
to continue.
    The following is a broad breakdown of the flows for the
week, including mutual funds and exchange-traded funds:
 Sector                 Flow      % of      Assets        Count
                        Change    Assets    ($ blns)      
                        ($ blns)                          
 All Equity Funds       2.705     0.04      7,088.747     11,762
 Domestic Equities      4.129     0.08      5,068.316     8,372
 Non-Domestic Equities  -1.424    -0.07     2,020.431     3,390
 All Taxable Bond       -0.236    -0.01     2,871.647     5,843
 Funds                                                    
 All Money Market       28.367    0.95      3,003.416     1,003
 Funds                                                    
 All Municipal Bond     1.502     0.32      464.716       1,337
 Funds                                                    
 
    

 (Reporting by Jennifer Ablan; Editing by Tom Brown and Lisa
Shumaker)
  
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