U.S.-based stock funds post 5th straight week of withdrawals: Lipper

By Tariro Mzezewa

NEW YORK (Reuters) - Investors pulled $6.5 billion out of U.S.-based stock funds during the week ended Feb. 3, Lipper data showed on Thursday, as investors largely shunned risky financial assets for the fifth straight week.

U.S.-based corporate investment-grade bond funds, another gauge of risk appetite, also saw significant cash withdrawals, with investors yanking $1.5 billion from the sector for an 11th straight week. U.S.-based emerging market debt funds posted $415 million in outflows, the group's 15th straight week of cash withdrawals, Lipper said.

Taxable bond mutual bond funds had outflows of $523 million, their lightest since they began cash withdrawals 13 weeks ago, according to Lipper data.

As investors shied away from risky assets, they continued to add U.S.-based government Treasury funds and high-yield municipal bond funds. Treasury funds attracted inflows totaling $1.5 billion for the eighth consecutive week, Lipper data showed. U.S.-based high yield muni funds posted inflows of $78.6 million, marking their 18th straight week of gains.

Investors also did some bottom-fishing in some beaten-down sectors.

"There's enough bad news fatigue," said Jeff Tjornehoj, head of Americas research at Lipper. "Oil prices have been low for a while, the U.S. economy isn't falling off a cliff, so how much worse can it get?"

Commodities precious metals funds, which mainly invest in gold futures, had inflows of $893 million for a fourth straight week of inflows. Energy-sector stock funds took in $404 million during the week, Lipper data showed.

Notably, U.S.-based investors added $2.1 billion to equity mutual funds for their first week of positive flows this year, but U.S.-based ETF investors pulled $8.6 billion during the same period, which led to the overall group to post $6.5 billion in cash withdrawals, Lipper said.

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 Diane Craft, Jennifer Ablan and David Gregorio)

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