UPDATE 1-Investors flock to U.S.-based investment-grade debt, junk bond funds -Lipper

(Adds context, table, byline)
By James Thorne
NEW YORK, Aug 9 (Reuters) – Investors in U.S.-based taxable
bond funds deposited $4.2 billion for the week ended on
Wednesday, the largest weekly inflow since April, according to
Lipper data on Thursday.
Of that amount, fund investors put $2.8 billion into
U.S.-based corporate investment-grade bond funds, extending a
streak since March, and deposited $828 million into high-yield
bond funds, Lipper said.
“Investors feel comfortable reaching for yield even though
spreads are tightening,” said Tom Roseen, head of research
services at Thomson Reuters Lipper.
Andrew Brenner, head of international fixed income at
NatAlliance Securities, told clients on Thursday that “in an
economy that is growing 3 to 4 percent, we think investment
grade debt is OK. Fair, not cheap.”
Fund investors also showed demand for safe-haven assets and
cash. U.S. Treasury funds took in $991 million, and money market
funds attracted more than $16.6 billion, which was the most in a
month.
Despite the U.S. stock market’s strong performance during
the week, domestic equity funds posted withdrawals of $2.5
billion, after three weeks of inflows, Lipper data showed.
U.S.-based international equity funds attracted $1.5
billion, the most since April.
“People were making a bet against domestic equity funds,”
Roseen said.
The following is a breakdown of the flows for the week,
including mutual funds and ETFs:

Sector Flow Chg Pct of Assets Count
($ blns) Assets ($ blns)
All Equity Funds -0.962 -0.01 7,572.185 12,344
Domestic Equities -2.486 -0.05 5,343.772 8,768
Non-Domestic 1.524 0.07 2,228.413 3,576
Equities
All Taxable Bond 4.156 0.15 2,811.532 6,093
Funds
All Money Market 16.638 0.61 2,736.409 1,038
Funds
All Municipal Bond 0.623 0.14 437.828 1,455
Funds

(Reporting by James Thorne; editing by Tom Brown and Richard
Chang)

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