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Lipper: Mutual Fund Flows Slowing


Mutual funds continue to draw new money, although investors seem to be waning in enthusiasm following President Barack Obama's first second-term State of the Union address.

Mutual funds and ETFs, excluding money market funds drew, net inflows of $4.4 billion for the week ended Feb. 13, according to Matthew Lemieux of Lipper.

Equity funds fell in popularity somewhat, but continued to draw flows. Overall, the group added $559 million in net flows.

Regarding the fall, "This total was much lower than what we saw over the prior two weeks because of a definitive split between sales and redemption numbers for mutual funds and ETFs," Lemieux said.

Stock mutual funds saw their sixth consecutive week of inflows with $2.4 billion this last week. Given that this follows net inflows of $37.4 billion for January, the strongest first month of the year since 2000, this is "a strong signal that retail investors are maintaining their optimism in the markets," Lemiux said.

Taxable bond funds also posted their sixth consecutive week of net inflows at $3.3 billion, although a lot of that movement was due to "an ever-growing interest in bank loan products (+$1.4 billion) as investors seemed to be seeking yield but also the interest-rate protection these products can provide."

Meanwhile, equity ETFs pulled back a bit, redeeming a net $1.8 billion, which Lemiux could be due to how "many investors still feel the market is primed for a correction." It's also possible, he said, that institutions reallocated their passive exposure to other more specific sectors of the market.

International & global debt funds posted their thirty-third consecutive week of net inflows with $789 million in new cash. Meanwhile, investors continued to pull out of U.S. Treasury-based products, and the category netted $310 million in outflows.

Municipal bond funds added $491 million for the week, and money market funds lost -$9.7 billion, posting outflows for the second consecutive week.


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