Tags: ICI | Exodus | Bond | Funds

Trade Group ICI: Exodus from US Bond Funds Slows

Wednesday, 24 Jul 2013 04:06 PM

Investors in mutual funds based in the United States continued to yank money from bond funds in the latest week, but the pace of withdrawals slowed to $3.49 billion, the Investment Company Institute said on Wednesday.

Investors have pulled cash out of bonds for the past seven consecutive weeks, but this week, outflows were much less than the $8.1 billion in outflows those funds experienced in the previous week, said ICI, a U.S. mutual fund trade organization.

Outflows from bond funds may be ebbing after recent comments by Federal Reserve officials intended to soothe fears that the central bank was about to make an abrupt end to its easy money policies.

In late May, investors made a rush for the exits from bond funds after Fed Chairman Ben Bernanke said the central bank's policy of buying $85 billion in Treasuries and mortgage-backed securities a month would eventually come to an end.

Meanwhile, stock funds gained $3.84 billion in new investor cash in the week ended July 17, a decline from the previous week's inflows of $7.6 billion. Investors sent $2.46 billion to funds that hold only U.S. stocks, and those funds that hold stocks of companies outside the United States attracted $1.38 billion in new cash.

Funds that hold municipal bonds recorded outflows of $2.46 billion, up from outflows of $2.38 billion the previous week.

Taxable bond funds also recorded withdrawals of $1.04 billion, slowing the exodus out of those funds, which had $5.7 billion in outflows the previous week.

Hybrid funds, which can invest in stocks and fixed-income securities, attracted $3.19 billion in new investor cash.

© 2015 Thomson/Reuters. All rights reserved.

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