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TABLE-U.S.-based bond funds extend streak of positive inflows

NEW YORK, June 28 (Reuters) - U.S. investors moved roughly $6.3 billion into bond funds in the week ended June 21 despite the Federal Reserve's decision to hike interest rates the week before, continuing an unbroken streak of positive weekly inflows into debt funds for the year to date, Investment Company Institute data showed Wednesday. The Fed raised its benchmark interest rates to a range between 1 and 1.25 percent, the third consecutive quarterly increase, and the central bank has signaled one more rate hike this year. Investors are moving into bonds despite rising interest rates in part because of demographic shifts that now favor stable income streams, said Alan Gayle, director of asset allocation at RidgeWorth Investments, which has $40.2 billion in assets under management. "Typically you don't fight the Fed when it starts raising rates, but there's a big demographic push toward older savers that is fooling a lot of traditional cyclical investors," he said. The U.S. Treasury yield curve flattened to almost 10-year lows on June 21st, with the yield of the 30-year bond falling to 2.72 percent, the lowest since Nov. 9. Stock funds pulled in $684 million in the week, the smallest positive gain since July 2016 and a steep decline from the $27.3 billion in inflows the week before. Investors pulled about $7.9 billion from U.S.-focused stock funds, while moving about $8.6 billion into international funds. That move toward international stocks reflects stretched valuations for U.S. stocks, which remain near all-time highs, Gayle said. The following table shows estimated ICI flows for mutual funds and exchange-traded funds (all figures in millions of dollars):

6/21/17 6/14/17 6/7/17 5/31/17 5/24/17 Equity 684 27,288 -7,726 13,999 -828 Domestic -7,876 19,624 -11,093 8,482 -5,487 World 8,560 7,664 3,367 5,517 4,659 Hybrid -417 -753 -861 -266 -206 Bond 6,254 7,665 13,621 4,918 8,012 Taxable 5,332 7,089 12,305 4,674 7,347 Municipal 922 576 1,316 245 665 Commodity 90 65 997 -458 -152 Total 6,612 34,264 6,030 18,193 6,826

(Reporting by David Randall; Editing by Jennnifer Ablan and Diane Craft)