The $2.7 billion in equity fund net redemptions negated cumulative
inflows of the prior two weeks totaling $1.9 billion.
In the course of the reporting period, the US benchmark Standard
& Poor's 500 stock index rose. 2.19 percent.
Excluding from the mix exchange-traded funds, anecdotally
considered a proxy for institutional investor behavior, equity funds had
slightly lower net outflows of $1.96 billion.
"Equities just didn't have the support from the ETFs
that we have seen in the past," said Matthew Lemieux, research analyst at
Lipper.
The large-cap State Street SPDR S&P 500 ETF had net
outflows of $1.1 billion, followed by a $583 million net outflow from the
Invesco Powershares QQQ Trust 1 ETF.
However, on the plus side was a $514 million net inflow
for the BlackRock iShares MSCI EAFE index fund, which tracks stocks in
developed markets, globally.
Investors continued their pursuit of yield by plowing more
cash into equity income funds, with net new cash of $853 million, extending the
inflow streak to 34 consecutive weeks.
Investors have pumped a net $25.6 billion into these
funds in the last year.
"Interest in them is being driven by the uncertainty
and volatility in the market, the uncertainty over capital appreciation. Maybe
people might be finding solace in the stability of the dividends," said
Lemieux.
Emerging market equities managed a meager $60 million net
inflow while the debt funds in the category pulled in $51 million in fresh
capital. However, there were outflows from Asia ex-Japan and Latin American
equity funds.
Taxable bond funds pulled in a net $1.6 billion, for a
third straight week of gains. Municipal bond fund inflows rebounded to $523
million for five straight weeks of gains. The sector, severely punished in the
first half of last year, has seen fresh capital in 16 out of the last 18
weeks.
"The money that came in (to taxable bond funds) was
at a lower rate," said Lemieux, who highlighted that there is still interest
in higher quality bonds as well as high yield.
Corporate investment grade bond funds pulled in a net $1.1
billion while high yield funds had net inflows of $774 million.
Overall though the level of net change in the flows was subdued
at the start of the year, said Lemieux.
"A lot of the market moves have come off of the news
wires over the last six to eight months. There hasn't been a lot of news out of
Europe this week and nothing that is churning the market. We'll have to see if
activity picks up," he said.
