By Sam Forgione
NEW YORK (Reuters) – Investors in U.S.-based funds pulled $597 million out of funds that specialize in commodities and precious metals in the week ended May 20, data from Thomson Reuters’ Lipper service showed on Thursday.
The outflows were the biggest since December 2013. Stock funds posted $1.7 billion in outflows over the latest week after attracting $3.7 billion in inflows the prior week.
U.S.-based non-domestic-focused stock funds attracted $3.3 billion of inflows, their 15th straight week of net new cash.
“I’m speculating here but possibly stronger economic news caused investors to pull money out of commodities and into stocks,” said Patrick Keon, research analyst at Lipper.
Taxable bond funds attracted $4.6 billion in new cash to mark their second straight week of inflows, while low-risk money market funds attracted $15.6 billion to mark their biggest inflows since the week ended March 11.
Keon said investors’ appetite for risk-taking made a comeback.
High-yield “junk” bond mutual funds and ETFs saw inflows with high yield ETFs attracting $445 million of new cash and high yield mutual funds with $906 million. Junk bond funds had the largest inflows for taxable bond funds for their groups.
“Equity indices bounced last week, with the S&P 500 up 1.3 percent, Dow Jones Industrial Average up 1.2 percent,” Keon said. “High yield fund returns are the most closely correlated with equities out of taxable bonds, so there might be a relationship there.”
So far this year, high yield mutual funds have taken in $5.1 billion in net new money while high yield ETFs have had net inflows of roughly $3 billion, Keon said.
The following is a broad breakdown of the flows for the week, including exchange-traded funds (in $ billions):
Sector Flow Chg % Assets Assets Count
All Equity Funds -1.655 -0.03 5,482.071 11,673
Domestic Equities -4.935 -0.13 3,909.103 8,396
Non-Domestic 3.280 0.21 1,572.968 3,277
All Taxable Bond 4.645 0.20 2,373.299 6,052
All Money Market 15.628 0.68 2,299.411 1,275
All Municipal Bond -0.091 -0.03 345.837 1,479
(Reporting by Sam Forgione; Editing by Jennifer Ablan, Lisa Shumaker and Bernard Orr)