Investors pump $6.6 billion into stock and taxable ETFs: Lipper

By Trevor Hunnicutt

NEW YORK (Reuters) - U.S-based stock and bond exchange-traded funds attracted $6.6 billion of new money in the week ended Wednesday, according to data from Lipper, marking another week of risk-taking by institutional investors.

"There was quite a dichotomy between retail and ETF investors," Tom Roseen, head of research services at Lipper, said. "The retail investors are still sitting on the sidelines, despite three up weeks in the broad-based indices. So it is risk on, but not for all."

Investors in ETFs are often thought to represent the institutional investor, including hedge funds. Mutual funds are thought to represent retail investors.

Institutional investors have poured money into ETFs as chances of a Federal Reserve interest-rate increase in 2015 are diminishing amid new signs of anemic economic activity.

Roseen pointed out that U.S.-based stock mutual funds, predominately owned by mom-and-pop retail investors, posted outflows of $166 million in the week ended Wednesday. That was the fourth consecutive week of withdrawals and brought the group's four-week moving average of weekly outflows to $2.68 billion, according to Lipper data.

"Despite reports of a jump in homebuilder confidence in October and housing starts near 8-year highs during the latter portion of the flows week, mixed corporate results, China’s slowing growth, the EIA’s report of a big jump in crude oil supplies, and the Fed’s inaction has kept some investors on the fence," Roseen added.

Taxable bond funds took in $4.4 billion during the same period, according to the Lipper data released on Thursday. The inflows marked the third consecutive week of inflows for fixed-income funds, with higher yielding junk-bond funds taking in $3.3 billion in new money during the week. That was the junk-bond fund group's second largest weekly net inflow since Lipper began tracking weekly flows, Roseen said.

"So there must be an appetite for yield and risky products," he said.

U.S.-based emerging markets equity funds attracted $345 million over the weekly period, the category's third straight week of inflows, Lipper said.

Overall, U.S.-based money market funds posted $2.6 billion in outflows over the weekly period, after four consecutive weeks of inflows, Lipper data showed.

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

(Reporting by Trevor Hunnicutt; Editing by Jennifer Ablan and Christian Plumb)

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