Find the best credit card offers online.Net inflows for long-term mutual funds were reported for the 45th week, or close to a year, on the sustained strength of bond funds as more money entered stock funds, the Investment Company Institute revealed in its latest figures.
Inflows for these long-term mutual funds were estimated at $13.18 billion in the week ending January 20. The whole 45-week streak now totals about $454 billion. The inflows started during March last year when equity markets slumped. But even as money kept on flowing into stock funds, the bigger share of investments actually went to bond funds last year.
Inflows of $3.95 billion went into stock funds last week, dropping from $5.77 billion in the previous week. Despite a recent trend of outflows, equities saw two straight weeks of inflows, with $1.27 billion reported last week. Foreign funds, meanwhile, added $2.68 billion.
Bond funds received $7.96 billion last week, climbing slightly from $7.36 billion the week before, ICI said. In addition, taxable funds took in $6.73 billion while municipal funds got $1.23 billion. Yields from taxable and municipal funds stayed at an all-time low of 0.02 percent for the third straight week.
On the other hand, investors were upbeat on hybrid funds, putting in $1.27 billion, which is up from $7.36 billion the previous week. Hybrid funds are those that invest in a combination of stocks and fixed-income assets.
However, money market fund assets plunged $13.75 billion last week amid outflows from the government and prime funds, iMoneyNet said.
Taxable money market funds’ seven-day yields were held at a record low of 0.03 percent. This yield had been declining amid Fed moves to keep federal-fund rates to near zero. The Fed further affirmed this last Wednesday saying it will keep these rates low until high unemployment remains a hurdle in the US economic recovery.
Total assets of money-market funds reflected this overall trend, plummeting to $3.191 trillion as of Tuesday.
Taxable money market funds slid to $2.8 trillion, a fall of $11.11 billion from the previous week, after institutional investors took out $5.33 billion and individual investors withdrew $5.78 billion. Prime fund assets dropped $4.22 billion while government funds had outflows of $6.89 billion, iMoneyNet added.
Outflows were likewise posted on tax-free funds-a total of $2.65 billion—amid seven-day yields at 0.02 percent and 30-day yields at 0.03 percent.
Some economists, however, are forecasting a Fed interest rate increase later this year. This could help ease the burden for fund companies currently waiving fees just to maintain investments.
