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(Adds quotes from Lipper research analyst)
By Sam Forgione
NEW YORK, June 30 (Reuters) - Low-risk money market funds attracted $25.1 billion in new cash in the week ended June 29 after Britain voted to leave the European Union, a process often referred to as Brexit, data from Thomson Reuters' Lipper service showed on Thursday.
Stock funds posted $6.8 billion in outflows to mark their biggest withdrawals since early May, while taxable bond funds posted $2.6 billion in outflows after raking in $2.5 billion the prior week.
Commodities and precious metals funds, as well as funds that specialize in safe-haven U.S. Treasuries, attracted their biggest inflows since February.
Lipper research analyst Pat Keon said U.S.-domiciled mutual funds took in $18.9 billion in net new money for the fund-flows week ended Wednesday, but the large net inflow number is almost entirely attributable to money market funds "as investors put money on the sidelines to wait out the uncertainty caused by the Brexit leave vote."
Municipal bond funds, also considered low-risk, contributed to the overall inflows with their 39th straight week of gains, at $649 million, Keon said. Taxable bond funds posted withdrawals of $4.1 billion and equity funds had outflows of $2.8 billion, Keon added.
"As would be expected, non-domestic equity funds accounted for the lion's share of the net outflows at negative $2.5 billion among equity funds while for taxable bond funds investors fled from below investment-grade funds in a risk-off strategy in response to Brexit," Keon said.
For their part, U.S.-based stock mutual funds, which are held by retail mom-and-pop investors, posted cash withdrawals of $2.8 billion over the weekly period ended Wednesday, their 16th straight week of outflows, Lipper data showed.
Cash might move back into equity markets as Wall Street rolled to a third straight day of gains on Thursday. Stock markets have erased the bulk of their losses in the wake of Britain's shock vote a week ago to leave the European Union that had set off the worst two-day decline for Wall Street in 10 months.
"We're reversing the 'Brexit' as it becomes evident that it was more of a political vote and decision than an economic decision," said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.
Overall, riskier high-yield junk funds saw $1.8 billion leave while bank loan funds suffered about $600 million in net outflows, Keon said.
The following is a broad breakdown of the flows for the week, including ETFs (in $ billions):
Sector Flow Chg % of Assets Count
($ blns) Assets ($ blns) All Equity Funds -6.836 -0.13 5,063.920 12,101 Domestic -5.647 -0.16 3,606.202 8,600 Equities Non-Domestic -1.190 -0.08 1,457.717 3,501 Equities All Taxable Bond -2.550 -0.11 2,253.071 6,093 Funds All Money Market 25.070 1.08 2,356.330 1,117 Funds All Municipal 0.716 0.19 376.024 1,409 Bond Funds
(Editing by Jennifer Ablan; Editing by Chris Reese) ((Sam.Forgione@thomsonreuters.com; 646-223-6189; Reuters Messaging: sam.forgione.thomsonreuters.com@reuters.net))
By Sam Forgione
NEW YORK, June 30 (Reuters) - Low-risk money market funds attracted $25.1 billion in new cash in the week ended June 29 after Britain voted to leave the European Union, a process often referred to as Brexit, data from Thomson Reuters' Lipper service showed on Thursday.
Stock funds posted $6.8 billion in outflows to mark their biggest withdrawals since early May, while taxable bond funds posted $2.6 billion in outflows after raking in $2.5 billion the prior week.
Commodities and precious metals funds, as well as funds that specialize in safe-haven U.S. Treasuries, attracted their biggest inflows since February.
Lipper research analyst Pat Keon said U.S.-domiciled mutual funds took in $18.9 billion in net new money for the fund-flows week ended Wednesday, but the large net inflow number is almost entirely attributable to money market funds "as investors put money on the sidelines to wait out the uncertainty caused by the Brexit leave vote."
Municipal bond funds, also considered low-risk, contributed to the overall inflows with their 39th straight week of gains, at $649 million, Keon said. Taxable bond funds posted withdrawals of $4.1 billion and equity funds had outflows of $2.8 billion, Keon added.
"As would be expected, non-domestic equity funds accounted for the lion's share of the net outflows at negative $2.5 billion among equity funds while for taxable bond funds investors fled from below investment-grade funds in a risk-off strategy in response to Brexit," Keon said.
For their part, U.S.-based stock mutual funds, which are held by retail mom-and-pop investors, posted cash withdrawals of $2.8 billion over the weekly period ended Wednesday, their 16th straight week of outflows, Lipper data showed.
Cash might move back into equity markets as Wall Street rolled to a third straight day of gains on Thursday. Stock markets have erased the bulk of their losses in the wake of Britain's shock vote a week ago to leave the European Union that had set off the worst two-day decline for Wall Street in 10 months.
"We're reversing the 'Brexit' as it becomes evident that it was more of a political vote and decision than an economic decision," said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.
Overall, riskier high-yield junk funds saw $1.8 billion leave while bank loan funds suffered about $600 million in net outflows, Keon said.
The following is a broad breakdown of the flows for the week, including ETFs (in $ billions):
Sector Flow Chg % of Assets Count
($ blns) Assets ($ blns) All Equity Funds -6.836 -0.13 5,063.920 12,101 Domestic -5.647 -0.16 3,606.202 8,600 Equities Non-Domestic -1.190 -0.08 1,457.717 3,501 Equities All Taxable Bond -2.550 -0.11 2,253.071 6,093 Funds All Money Market 25.070 1.08 2,356.330 1,117 Funds All Municipal 0.716 0.19 376.024 1,409 Bond Funds
(Editing by Jennifer Ablan; Editing by Chris Reese) ((Sam.Forgione@thomsonreuters.com; 646-223-6189; Reuters Messaging: sam.forgione.thomsonreuters.com@reuters.net))
