UPDATE 1-U.S.-based stock funds attract $8.9 bln over week -Lipper
(Adds additional flow data, market performance, analyst comment, table) By Sam Forgione NEW YORK, April 10 (Reuters) - Investors in U.S.-based funds poured $8.9 billion into stock funds in the week ended April 9, even as equity markets were hit with sharp selling that particularly weighed on tech and biotech shares, data from Thomson Reuters' Lipper service showed on Thursday. The net inflows into stock funds were the biggest in four weeks. Stock mutual funds attracted $3.1 billion of the inflows, while stock exchange-traded funds attracted $5.8 billion. Mutual funds are commonly purchased by retail investors, while ETFs are thought to represent the institutional investor. "Stock investors were starting to feel like they could get back into stocks after a couple days of losses," said Jeff Tjornehoj, head of Americas research at Lipper. The U.S. stock market has been hit with a wave of selling, particularly in high-growth stocks in the technology and biotechnology industries. Until recently, the effect on the broader market had been limited, though selling across sectors has picked up of late. Through Thursday, the Nasdaq Composite Index has fallen 2.9 percent since Jan. 1. Accelerated losses in recent weeks have sparked concerns that the market has reached a top for the time being. Funds that hold emerging market stocks attracted $2.3 billion in new cash, marking the third straight week of inflows. In the past two weeks alone, the funds have attracted $5 billion, marking their best two-week run since early last year. While the Standard & Poor's 500 stock index fell 1 percent over the weekly period, MSCI's index of global emerging market stocks rose 1 percent. Analysts have said that the prospect of fresh stimulus in China and the euro zone have helped boost emerging market stocks. The iShares MSCI Emerging Markets ETF attracted $2.1 billion of the total inflows into emerging market stock funds, as investors again sought exposure to rising prices of emerging market shares. The ETF attracted more than $2 billion the prior week. Taxable bond funds attracted $2.9 billion in new cash, for a fifth straight week of inflows. Investors sought riskier bonds and committed $368.3 million to emerging market bond funds, marking a second straight week of inflows, and $640 million to high-yield bond funds, a seven-week high. Funds that mainly hold U.S. Treasuries reported outflows of $182 million, for the first outflows in four weeks. Minutes from the Federal Reserve's latest policy meeting in March helped boost appetite for riskier bonds, said Tjornehoj of Lipper. The minutes suggested the U.S. central bank may not raise interest rates anytime soon. "The Fed is telling people risky assets are not going to be harmed," Tjornehoj said. Commodities and precious metals funds, which mainly invest in gold futures, posted outflows of $228.7 million, marking their second straight week of outflows. Low-risk money market funds posted $11.2 billion in outflows, marking their sixth straight week of withdrawals. "It hasn't paid to stand on the sidelines," Tjornehoj of Lipper said on the outflows from money market funds. So far this year through Thursday, the Standard & Poor's 500 is down 0.8 percent, while the Barclays U.S. Aggregate bond index had risen 2.27 percent through Wednesday. The weekly Lipper fund flow data is compiled from reports issued by U.S.-domiciled mutual funds and exchange-traded funds. The following is a broad breakdown of the flows for the week, including exchange-traded funds (in $ billions): Sector Flow Chg % Assets ($Bil) Count ($Bil) Assets All Equity Funds 8.935 0.22 4,029.978 10,709 Domestic Equities 5.228 0.17 2,991.585 7,818 Non-Domestic 3.708 0.36 1,038.393 2,891 Equities All Taxable Bond 2.854 0.16 1,741.181 5,387 Funds All Money Market -11.177 -0.48 2,324.246 1,322 Funds All Municipal Bond 0.274 0.10 282.993 1,436 Funds (Reporting by Sam Forgione; Editing by Diane Craft and Steve Orlofsky)
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