August 10, 2017 / 11:21 PM / a year ago

UPDATE 1-U.S. stock funds post largest withdrawals in 5 weeks -Lipper

 (Adds data on mutual funds and ETFs, analyst quote, table,
    By Trevor Hunnicutt
    NEW YORK, Aug 10 (Reuters) - U.S. fund investors reduced
their exposure to stocks and bought bonds during the latest
week, Lipper data showed on Thursday, as saber-rattling between
the United States and North Korea appeared to shake investor
    Stock funds in the United States posted $2.8 billion in
withdrawals during the seven days through Aug. 9, marking the
largest outflows in five weeks.
    Nearly $31 billion moved into relatively low-risk money
market funds, the strongest figure since 2013. About $4 billion
moved into taxable and municipal bonds, according to the
research service.
    Investors took that defensive crouch as the United States
and North Korea exchanged threats during the week. On Tuesday,
U.S. President Donald Trump said aggression from Pyongyang would
be "met with fire and fury like the world has never seen." North
Korea's state media reported the country had plans to fire
missiles near the U.S. Pacific territory Guam.
    "It's people taking money out of play," said Pat Keon,
senior research analyst for Thomson Reuters' Lipper unit.
    "This is driven more by geopolitical news than financial or
economic news," overshadowing positive signs from strong
second-quarter corporate earnings, recent data on jobs and wage
growth and a supportive Federal Reserve. The S&P 500
index is down more than 1.3 percent over the last week.
    Within equities, investors favored exposure abroad, putting
$1.5 billion in non-domestic funds while pulling $4.3 billion
from stocks at home.
    In bonds, investors preferred investment-grade corporate
bond funds over safe-haven Treasuries that offer lower returns.
Treasury fund outflows of $69 million for the week compare to
$2.5 billion in inflows for the investment-grade funds.
    Precious metals funds continued to report weak sales despite
the risk-off sentiment and four straight weeks of positive
performance. Withdrawals for the category were $225 million for
the week, the data showed.
    The following is a breakdown of the flows for the week,
including mutual funds and exchange-traded funds:
 Sector                    Flow Chg  % Assets  Assets     Count
                           ($blns)             ($blns)    
 All Equity Funds          -2.809    -0.05     6,137.546  11,469
 -Domestic Equities        -4.348    -0.10     4,219.756  8,176
 -Non-Domestic Equities    1.538     0.08      1,917.789  3,293
 All Taxable Bond Funds    3.289     0.13      2,496.877  5,795
 All Money Market Funds    30.930    1.27      2,467.397  1,093
 All Municipal Bond Funds  0.631     0.16      392.862    1,419
 (Reporting by Trevor Hunnicutt; Editing by Jennifer Ablan and
Phil Berlowitz)
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