(Adds details on mutual funds and ETFs, analyst quote, table, byline) NEW YORK, July 20 (Reuters) - U.S. fund investors shifted $7.6 billion to the safe harbor of taxable bonds during the most recent week, Lipper data showed on Thursday, as Republicans efforts to pass major healthcare policy stalled. The bond funds took in the most cash since March, and the rotation from domestic to international stocks accelerated, the research service's data for the week ended July 19 showed. U.S. equity funds bled $5.5 billion, but funds focused on shares abroad pulled in $3 billion. The U.S. dollar and Treasury yields lost ground earlier this week as Republican efforts to overhaul Obamacare collapsed and softening economic data added to the uncertainty about the pace of future interest rate hikes by the Federal Reserve.
Falling yields raise existing bonds' prices. Investment-grade debt funds pulled in $3.8 billion, continuing an unbroken streak of inflows this year. High-yield funds attracted $2.2 billion, their best week since April, following four weeks of withdrawals. "Retail money has returned in the usual way - chasing performance," wrote Bank of America Corp credit strategists Hans Mikkelsen and Yunyi Zhang in a note on Tuesday. Skittish investors skirted domestic stocks, with healthcare stocks posting their largest weekly withdrawals since May, $296 million. Financial sector funds recorded $179 million in withdrawals as Goldman Sachs Group Inc on Tuesday reported a 40 percent slump in bond trading revenue and the weakest commodities results in its history as a public company for the second quarter. Oil prices have rebounded from prices under $43 a barrel last month in New York, to nearly $47, but energy stock funds nonetheless posted $465 million of outflows. That amounts to those funds' largest withdrawals since September 2016. International stocks continued to be popular. Investors sent $1.6 billion to emerging market stock funds based in the United States, their best week of flows since March. Precious metals commodities funds, including those invested in gold, posted $668 million in withdrawals, their largest outflows since December even though the funds' performance was positive for the week. The following is a breakdown of the flows for the week, including mutual funds and exchange-traded funds:
Sector Flow Chg Pct of Assets Count ($ blns) Assets ($ blns) All Equity Funds -2.588 -0.04 6,090.018 11,495 Domestic Equities -5.540 -0.13 4,243.403 8,231 Non-Domestic Equities 2.952 0.16 1,846.615 3,264 All Taxable Bond Funds 7.648 0.31 2,473.946 5,781 All Money Market Funds -5.631 -0.23 2,465.656 1,090 All Municipal Bond Funds 0.299 0.08 388.621 1,395
(Reporting by Trevor Hunnicutt; editing by Jennifer Ablan and Tom Brown)