November 25, 2017 / 12:14 AM / a year ago

UPDATE 1-U.S.-based stock ETFs attract $9.4 bln of inflows in latest week -Lipper

 (Adds analyst quote on ETF vs active mutual fund flows, byline)
    By Jennifer Ablan
    NEW YORK, Nov 24 (Reuters) - Investors poured $9.4 billion
into U.S.-based stock exchange-traded funds (ETFs) in the week
ended Wednesday, the group's eighth consecutive week of inflows,
against a backdrop of record closing highs on major markets,
Lipper data showed on Friday.
    Retail investors, however, yanked money out of U.S.-based
stock mutual funds, pulling $3.5 billion during the same period,
continuing a heavy streak of outflows that has persisted in all
but two weekly periods in 2017, Lipper data showed.
    ETFs are generally believed to represent the investment
behavior of institutional investors including hedge funds, while
mutual funds are thought to represent the mom-and-pop retail
    "Increasingly advisors and retail investors are choosing
lower-cost ETFs over active equity mutual funds in an effort to
put more money to work, because ETFs have performed better and
as regulations for advisors have favored index-based
strategies," said Todd Rosenbluth, director of ETF and Mutual
Fund Research at CFRA. 
    Risk-taking was also on display in parts of the U.S.
corporate credit markets. U.S.-based investment-grade corporate
bond funds attracted $2.6 billion of inflows in the latest week,
their 10th consecutive week of inflows, Lipper said.
    At the lower end of the credit-quality spectrum, junk bonds
were avoided again by investors. U.S.-based high-yield bond
funds posted $209 million of outflows in the week ended
    U.S.-based international equities attracted $2 billion in
the latest week, the sector's 14th consecutive week of inflows,
Lipper added. For their part, emerging-market debt funds posted
inflows of $322 million and emerging-market equities posted
outflows of $68 million, according to Lipper data. 
    U.S.-based domestic equities funds saw $3.88 billion of
inflows in the latest week ended Wednesday, following $2.35
billion of outflows the previous week. U.S.-based non-domestic
equities funds posted inflows of $2 billion in the latest week,
their 10th straight week of inflows, according to Lipper data. 
    Investors hedged their equity exposure by stashing some
money away in cash and cash-equivalent accounts. U.S.-based
money market funds attracted $14.4 billion of inflows in the
latest week, their third straight week of inflows, Lipper said.
    The following is a breakdown of the flows for the week,
including mutual funds and ETFs:   
 Sector                Flow Chg     % Assets  Assets      Count
                       ($Bil)                 ($Bil)      
 All Equity Funds      5.911        0.09      6,627.814   12,126
 Domestic Equities     3.881        0.09      4,524.314   8,654
 Non-Domestic          2.029        0.10      2,103.500   3,472
 All Taxable Bond      2.413        0.09      2,607.392   6,030
 All Money Market      14.359       0.57      2,539.795   1,053
 All Municipal Bond    0.659        0.16      400.114     1,476
 (Reporting by Jennifer Ablan; Editing by James Dalgleish)
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