American stock funds post $12.3b outflows in week

NEW YORK, Jan 8 (Reuters): Investors in US-based funds pulled $12.3 billion out of stock funds in the week ended Jan. 7 as a drop in oil prices hurt risk appetite at the start of the year, data from Thomson Reuters' Lipper service showed on Thursday.
The outflows marked the funds' first withdrawals in three weeks. Funds that specialize in US stocks accounted for most of the outflows with $11.3 billion in withdrawals, while funds that specialize in non-US stocks posted $958 million in withdrawals.
Most of the outflows came from stock exchange-traded funds, which posted $9.2 billion in withdrawals, while stock mutual funds posted $3.1 billion in outflows. ETFs are thought to represent the behavior of institutional investors, while mutual funds are commonly purchased by retail investors.
"It was a bumpy start to the week," said Pat Keon, research analyst at Lipper. US crude slumped and hit a 5-1/2-year low of $46.83 on Wednesday and contributed to a 1.6 per cent dip in the benchmark S&P 500 stock index over the period. Emerging market stock funds posted $503 million in withdrawals, their sixth straight week of outflows, while emerging market bond funds also posted their sixth week of outflows, at $293 million.
Taxable bond funds overall attracted $3.8 billion in new cash, however, marking a reversal from the prior week's $5.9 billion in outflows, which were the biggest since June 2013. Funds that hold safe-haven Treasuries posted a second straight week of outflows, at $397 million, and funds that specialize in inflation-protected bonds posted their biggest withdrawals in five weeks, at $101 million.
Riskier high-yield bond funds posted their sixth straight week of outflows, at $922 million, while investment-grade corporate bond funds, which sport higher-quality credit ratings, attracted $3 billion.
That reversed outflows of $1.2 billion from investment-grade bond funds the prior week, which were the biggest since Oct. 2013. The market volatility over the period, stemming largely from the drop in oil prices, drove investors to the safety of bond funds, said Keon of Lipper. Investors pulled cash out of low-risk money market funds, meanwhile, to the tune of $12.7 billion.
That marked the funds' first outflows in three weeks. The weekly Lipper fund flow data is compiled from reports issued by US-domiciled mutual funds and exchange-traded funds.