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U.S.-based stock funds post $4 bln outflows in latest week -ICI
September 10, 2014 / 3:13 PM / in 3 years

U.S.-based stock funds post $4 bln outflows in latest week -ICI

By Sam Forgione
    NEW YORK, Sept 10 (Reuters) - Investors in U.S.-based mutual
funds pulled $4 billion out of stock funds in the week ended
Sept. 3 on continued tensions surrounding Ukraine and Russia,
data from the Investment Company Institute showed on Wednesday.
    The outflows were the biggest in nine weeks and marked the
second straight week of withdrawals, according to data from ICI,
a U.S. mutual fund trade organization. Bond funds attracted $2.4
billion, marking their fourth straight week of inflows. 
    The net outflows from stock funds came entirely from funds
that specialize in U.S. stocks, which posted $5.3 billion in
withdrawals. Funds that mainly hold international stocks
attracted $1.3 billion, extending a streak of inflows that began
in May 2013.
    The outflows came despite strong U.S. manufacturing and
consumer sentiment data over the period.
    "Geopolitical uncertainties trumped the strong economic
numbers," said Alan B. Lancz, president of investment advisory
firm Alan B. Lancz & Associates Inc. in Toledo, Ohio. He said
the strong data led investors to take profits from U.S.-focused
stock funds and direct that cash toward cheaper stocks overseas.
    Stock indexes worldwide fell early in the weekly period
after Ukraine said Russia had moved more troops into the
country, while doubts over the countries' peace talks later in
the period hurt U.S. shares.
    The benchmark Standard & Poor's 500 stock index ended
nearly flat from the close of Aug. 27 through the close of Sept.
3, while MSCI's all-country world equity index 
rose just 0.1 percent. 
    The inflows into bond funds were down from inflows of $3.7
billion the prior week, but still showed healthy demand.
Investors were assured that the Federal Reserve would not raise
rates sooner than expected in the wake of a dovish speech from
Fed Chair Janet Yellen on Aug. 22, Lancz said.
    Hybrid funds, which can invest in stocks and fixed income
securities, attracted $544 million in new cash, marking their
fourth straight week of inflows. 
    The following table shows estimated ICI flows for the past
five weeks (all figures in millions of dollars):
                      9/3/2014     8/27    8/20    8/13     8/6
 Total equity           -4,024     -577   2,671     320    -471
    Domestic            -5,305   -2,199     738    -974  -3,073
    World                1,281    1,623   1,933   1,294   2,602
 Hybrid*                   544      943     821     496    -375
 Total bond              2,430    3,655   4,999   1,436  -8,193
    Taxable              1,768    2,921   4,185     539  -8,658
    Municipal              661      734     814     897     465
 Total                  -1,050    4,021   8,490   2,252  -9,040
 *Hybrid funds can invest in stocks and/or fixed income

 (Reporting by Sam Forgione; Editing by Meredith Mazzilli)

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