U.S. stock mutual funds gain $7.5 billion, most since 2001: Lipper
Investors in U.S.-based funds poured $7.53 billion into stock mutual funds, the most since 2001, after U.S. lawmakers reached a deal to avert tax increases and spending cuts, data from Thomson Reuters' Lipper service showed on Thursday.
The inflow into stock mutual funds in the week ended January 9 was the biggest since May of 2001, while stock exchange-traded funds gained $10.78 billion in new cash.
When combined, the sums of cash into the two fund groups amounted to a massive $18.32 billion inflow into stock funds overall. That is the most net new cash since mid-2008.
Bond funds, meanwhile, attracted $4.24 billion in new cash. Bond mutual funds attracted $5.45 billion, the most since October of 2011, while bond ETFs suffered outflows of $1.21 billion.
The new cash into stock mutual funds was a far greater weekly turnout for the group than any other week last year, when retail investors opted for bond mutual funds and stock investments were dominated by opportunistic moves into ETFs.
"People were waiting to put money to work," said Tom Roseen, head of research services at Lipper.
"We got a resolution, period. And that was looming over everyone's heads," Roseen said on the "fiscal cliff" of $600 billion in tax hikes and spending cuts.
In a surprising turn, stock ETF investors pulled the most money out of the SPDR S&P 500 ETF, which has been a favorite for investors in past weeks. Investors yanked $1.26 billion out of the fund while catching exposure to emerging markets by giving $2.94 billion to the ishares: MSCI Emerging Market fund.
Roseen said that investors sought to capture profits from the SPDR index fund that tracks the benchmark U.S. stock index.
ETFs are generally believed to represent the investment behavior of institutional investors, while mutual funds are thought to represent the retail investor.
The benchmark S&P 500 index fell a slight .1 percent over the reporting period as news that the U.S. private sector stepped up hiring last month and encouraging data on the U.S. services sector clashed with caution ahead of corporate earnings and concerns over remaining policy talks over the debt ceiling and spending cuts.
On January 1, President Barack Obama and Congress reached a deal to raise taxes on the wealthiest U.S. citizens while postponing spending cuts for two months. The deal, overall, diminished the prospects of a major 2013 overhaul of the U.S. tax code.
Roseen of Lipper said that the "relief" of the tax outcome on capital gains and dividends led investors to put money back to work in stock mutual funds.
Along with the stronger appetite for risk in stocks, investors sought riskier bonds and pumped $1.11 billion into high-yield "junk" bond funds, the most since mid-September. Investors also gave $2.16 billion to investment-grade corporate bond funds, while taking $1.07 billion out of safe-haven Treasury funds, the most since October of last year.
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):
(Reporting by Sam Forgione; Editing by Eric Walsh)