Fund Flows Follow the Fed

Bond funds see an outflow after the FOMC meeting, while the rush to U.S equities slows down.
By Gregg Greenberg ,

The pattern of mutual fund flows in the week ended Feb. 4 may reflect the

Fed's

subtle change in monetary policy language following its FOMC meeting.

A total of $3.1 billion moved into equities in the last week, according to Trim Tabs Investment Research. That's a decline from the $5.8 billion moved into stock funds the prior week.

Funds that invest primarily in U.S. stocks had inflows of $2.6 billion, compared with $5.3 billion the prior week. International equity funds took in $600 million, up from $500 million the week before.

On the fixed income side, bond funds saw outflows of $300 million, compared with inflows of $500 million the prior week. Bonds fell sharply last Wednesday after the central bank's monetary policy committee removed the words "considerable period" from its statement, triggering speculation that the Fed might raise interest rates sooner than previously expected.

Mutual fund group Trim Tabs tracks daily flows of 90 fund families that have about 15% of all long term assets.

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