Investors continued to buy up bonds and unload stocks last week, as they reacted to President Obama's re-election and geared up for a heated debate over how to solve the fiscal cliff.
While bond funds raked in $7.5 billion, U.S. stock mutual funds lost another $2.1 billion during the week ended Nov. 7, according to the Investment Company Institute.
The total inflow into bonds this year is now more than $275 billion, while the outflow from stock funds approaches $110 billion.
Though the uncertainty over the election is now removed, investors are remain fearful. And as they keep a wary eye on fiscal cliff negotiations, the dynamic of favoring bonds over stocks has only intensified. Since Obama's reelection, the S&P 500 has declined more than 5%, while Treasuries have rallied, pushing the 10-year yield from just under 1.8% to about 1.6%. (Bond prices and yields move in opposite directions.)
Meanwhile, the ICI data also show that hybrid funds, which invest in both stocks and bonds and have been extremely popular among investors this year, brought in $553 million last week.
And international stock mutual funds drew in $300 million during the latest week, after losing more than $11 billion during 15 consecutive weeks of outflows.
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