U.S.-based domestic stock fund outflows biggest since July '14: ICI

NEW YORK (Reuters) - Investors in U.S.-based mutual funds pulled $5.7 billion out of funds that specialize in U.S. shares in the week ended April 15 as the U.S. tax-filing deadline approached and on continued demand for international shares, data from the Investment Company Institute showed on Wednesday.

The outflows were the biggest since early July and marked the seventh straight week of cash withdrawals from the funds, according to the data from ICI, a U.S. mutual fund trade organization.

Investors again favored funds that specialize in international shares and poured $2.9 billion into such funds to mark their 15th straight week of inflows. In total, stock funds posted $2.8 billion in outflows after attracting $1.9 billion in inflows the prior week.

Investors likely withdrew cash from U.S.-focused stock funds to pay taxes and to redirect cash toward funds that hold European shares, said Macrae Sykes, analyst at Gabelli & Co Inc in Rye, New York. April 15 marked the U.S. tax filing deadline.

"With European markets outperforming the U.S., I think there are probably some reallocations perhaps to the area," Sykes said. Europe's FTSEurofirst 300 index of top regional shares hit 15-year highs over the period.

Investors withdrew $943 million from municipal bond funds to mark their biggest outflows since the last week of 2013 and their second straight week of withdrawals. Analysts have said that investors typically withdraw cash from the funds to pay taxes.

The outflows from funds that hold tax-free municipal bonds overshadowed $627 million in cash inflows to taxable bond funds, resulting in total outflows of $316 million from bond funds. The overall outflows came after inflows of $1.7 billion the prior week.

Hybrid funds, which can invest in stocks and fixed income securities, attracted $162 million from investors to mark their 14th straight week of new demand.

The following table shows estimated ICI flows for the past five weeks (all figures in millions of dollars):

  4/15/2015 4/8 4/1 3/25 3/18

Total equity -2,763 1,906 -1,527 -1,167 1,948

Domestic -5,700 -1,321 -3,307 -4,478 -1,758

World 2,937 3,227 1,780 3,311 3,706

Hybrid* 162 250 720 538 912

Total bond -316 1,719 -1,296 2,404 452

Taxable 627 1,906 -1,392 1,701 258

  Municipal -943 -187 96 703 194

Total -2,917 3,875 -2,103 1,775 3,312

*Hybrid funds can invest in stocks and/or fixed income securities.

(Reporting by Sam Forgione; Editing by Jennifer Ablan and Ted Botha)