US fund investors pull money from international bonds for 30th straight week

Investors shied away from the riskiest US-based stock and bond funds during the latest week and added money to safer categories even as fears of an economic pullback began to abate.
Investors continued to sour on the riskiest debt, punishing US-based global bond funds with their 30th consecutive week of outflows. The $2.3 billion investors pulled from global bond funds during the week ended February 17 brought the streak of consecutive outflows to $47 billion in total, according to data released on Wednesday by the Investment Company Institute (ICI).
High-yield funds also continued to bleed. Investors pulled $1.1 billion from the lower-grade debt funds that week. Those funds marked their 15th straight week of outflows, a streak that has sliced nearly $29 billion in assets from such products, ICI data showed. Bond funds overall took in $964 million during the week, building on the prior week's $690 million haul as investors pumped money into higher-quality bond funds for the second straight week.
"Strong interest for investment grade and government bonds ended the streak of outflows for taxable bonds as confidence in US economic prospects improved," said Todd Rosenbluth, who leads mutual-fund research for S&P Global Market Intelligence. That week, reassuring US retail sales data boosted sentiment and US crude prices rallied from more than 12-year lows.
Investors also pulled $1.2 billion from US-based stock mutual funds in the latest week, according to ICI, a mutual fund trade organization. A $2.3 billion withdrawal from funds focused on US companies' shares targeted funds that invest mostly in smaller companies. Large-company domestic stock funds, often seen as more resilient to credit shocks, took in a net $277 million during the week. During the week, the large-cap S&P 500 index added 5.4 percent, including dividends.
Funds focused on international shares took in $1 billion, most of that money chasing developed-market firms. Municipal bond funds added $857 million of new money and a 20th week to their streak of inflows. Over that period, the funds brought in $18.6 billion of new money altogether. Investment-grade funds took in $2.8 billion in new cash, and safe-haven government funds took in $1.3 billion, their 10th straight week of inflows.