U.S.-based taxable bond mutual funds post sixth week of withdrawals

By Tariro Mzezewa

NEW YORK (Reuters) - Investors in U.S.-based funds pulled $4.36 billion out of taxable bond funds in the week ended Wednesday, marking their sixth consecutive week of withdrawals, data from Thomson Reuters' Lipper service showed on Thursday.

Riskier U.S.-based high-yield "junk" bond mutual funds posted $714 million of outflows over the same period, resulting in a four-week moving average of negative $508 million, the highest average since mid-July, Lipper data show.

Many other asset classes were not spared over the reporting period with persistent volatility stemming from a China-driven global economic crisis.

U.S.-based Chinese funds posted cash withdrawals of $180 million, their fourth straight week of outflows, Lipper said. U.S.-based emerging market stock funds lost $652 million, their sixth consecutive week of losses, while international and global debt funds experienced their eighth consecutive week of outflows, losing $181 million, according to Lipper data.

Back home, investors pulled $865 million from U.S.-based mutual stock funds, their third week of outflows, but U.S.-based equity exchange-traded funds attracted $4.8 billion. That followed outflows the previous week of $15.2 billion, their biggest weekly outflows since August 2014, according to Lipper.

Investors in exchange-traded funds are thought to represent the institutional investor, including hedge funds. Mutual funds are thought to represent retail "mom-and-pop" investors.

Overall, U.S.-based non-U.S.focused equities as well as those that focus on domestic equities attracted inflows, with the former posting $15.5 million and the latter bringing in $3.93 billion.

"Flows were somewhat muted considering the volatility we saw in the markets," said Patrick Keon, a research analyst at Lipper.

Although investors shunned energy-sector stock funds, which lost $189 million after attracting $372 million in the prior week, they added $2.12 billion to government Treasury funds, marking the fourth straight week of inflows.

The Lipper fund flow data is compiled from reports issued by U.S.-domiciled mutual funds and exchange-traded funds.

(Reporting by Tariro Mzezewa; Editing by Chris Reese and Lisa Shumaker)

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