Fund investors send biggest inflows to bonds since 2013 while U.S. stocks rally

sending $260 million in net inflows into world stock funds,

rally@ NEW YORK, Jan 15 (Reuters) - Fund investors began the new year by pulling $13.1 billion out of mutual funds and exchange-traded funds that hold U.S. stocks over the first full week of 2020, the largest pullback from the domestic stock market since September, according to data released Wednesday by the Investment Company Institute. At the same time, investors sent approximately $24.7 billion into funds that hold taxable or municipal debt, the largest single-week inflow into bonds since 2013. The retreat from the U.S. stock market comes as the benchmark S&P 500 index continues to post record highs after jumping nearly 30% over the course of 2019 thanks to a partial trade deal with China and expectations that the Federal Reserve will not raise interest rates any time soon. The S&P 500 index is up nearly 2% since the start of the year, more than double comparable indices in developed markets such as Europe and Japan. Yet some strategists and investors are cautioning that the U.S. stock market is becoming over-valued. "Signs of overbought conditions are growing, along with exuberant sentiment," said Craig Johnson, chief market technician at Piper Sandler. Fund investors remained slightly bullish on foreign stocks the smallest gain over the last four weeks.

The following is a broad breakdown of the flows for the week, including mutual funds and exchange-traded funds in millions of dollars:

1/8/2020 12/31/20 12/24/20 12/18/20 12/11/20

19 19 19 19Equity -12,882 -1,805 -3,551 1,355 -10,894Domesti -13,141 -3,849 -6,252 -519 -9,620


World 260 2,045 2,701 1,874 -1,274Hybrid -971 -55 -542 -1,730 -1,986Bond 24,744 9,164 9,562 11,014 12,483Taxable 21,211 7,659 6,901 8,629 10,192Municip 3,533 1,505 2,661 2,385 2,291


Commodity 92 311 61 17 -445Total 10,983 7,615 5,530 10,656 -841

(Reporting by David Randall; Editing by Lisa Shumaker)