January 15, 2020 / 4:49 PM / 14 days ago

Fund investors send biggest inflows to bonds since 2013 while U.S. stocks rally

    By David Randall
    NEW YORK, Jan 15 (Reuters) - Fund investors began the new
year by pulling $13.1 billion out of mutual funds and
exchange-traded funds that hold U.S. stocks over the first full
week of 2020, the largest pullback from the domestic stock
market since September, according to data released Wednesday by
the Investment Company Institute. 
    At the same time, investors sent approximately $24.7 billion
into funds that hold taxable or municipal debt, the largest
single-week inflow into bonds since 2013. 
    The retreat from the U.S. stock market comes as the
benchmark S&P 500 index continues to post record highs after
jumping nearly 30% over the course of 2019 thanks to a partial
trade deal with China and expectations that the Federal Reserve
will not raise interest rates any time soon. The S&P 500 index
is up nearly 2% since the start of the year, more than double
comparable indices in developed markets such as Europe and
Japan. 
    Yet some strategists and investors are cautioning that the
U.S. stock market is becoming over-valued.
   "Signs of overbought conditions are growing, along with
exuberant sentiment," said Craig Johnson, chief market
technician at Piper Sandler. 
    Fund investors remained slightly bullish on foreign stocks
by sending $260 million in net inflows into world stock funds,
the smallest gain over the last four weeks. 
    
    The following is a broad breakdown of the flows for the
week, including mutual funds and exchange-traded funds in
millions of dollars:
    
    
             1/8/2020  12/31/20  12/24/20  12/18/20  12/11/20
                             19        19        19        19
 Equity       -12,882    -1,805    -3,551     1,355   -10,894
    Domesti   -13,141    -3,849    -6,252      -519    -9,620
    c                                                
    World         260     2,045     2,701     1,874    -1,274
 Hybrid          -971       -55      -542    -1,730    -1,986
 Bond          24,744     9,164     9,562    11,014    12,483
    Taxable    21,211     7,659     6,901     8,629    10,192
    Municip     3,533     1,505     2,661     2,385     2,291
    al                                               
 Commodity         92       311        61        17      -445
 Total         10,983     7,615     5,530    10,656      -841
 

    
    

 (Reporting by David Randall; Editing by Lisa Shumaker)
  
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