July 5, 2018 / 11:27 PM / 4 months ago

UPDATE 1-Most cash since 2008 flows out of U.S. equity funds in June -Lipper

 (Adds details on funds, analyst quote, table, byline)
    By Trevor Hunnicutt
    NEW YORK, July 5 (Reuters) - Investors played it safe in
June, plucking the most cash out of U.S.-based equity funds
since the peak of the 2008 global financial crisis as U.S. trade
disputes discouraged risk, Lipper data showed on Thursday.
    U.S.-based stock mutual funds and exchange-traded funds
(ETFs) recorded $36.3 billion in withdrawals overall for the
month of June, according to the research service, preliminary
figures that would represent the largest withdrawals since
October 2008.
    The data also showed the funds have posted five straight
weeks of withdrawals as the Trump administration's tariffs on
$34 billion of Chinese imports are due to go into effect on
Friday.
    During the most recent, holiday-shortened week, $8.3 billion
moved out of U.S.-based equity funds and high-yield bond funds
shed $1.7 billion, Lipper said. U.S. markets were closed on July
4 for the U.S. Independence Day holiday.
    The possibility of a trade war has distracted markets from a
robust U.S. economic picture, and minutes from the latest
Federal Reserve meeting released on Thursday showed monetary
policymakers share some of the markets' concerns.
    Most Fed policymakers "noted that uncertainty and risks
associated with trade policy had intensified and were concerned
that such uncertainty and risks eventually could have negative
effects," according to the minutes.
    "The tariffs, the uncertain trade policy, and whether that
could lead, that's definitely been a negative," said Pat Keon,
senior research analyst for Thomson Reuters' Lipper unit.
    "Things will settle down over time once we actually know
what the end result is going to be."
    Investors piled into safer, higher-quality investments,
which included U.S.-based government-Treasury bond funds. That
group attracted $980 million of net new cash for the week ended
Wednesday, their fifth straight week of inflows, Lipper said.
    The following is a breakdown of the flows for the week,
including mutual funds and ETFs:
 Sector                    Flow Chg  % Assets  Assets     Count
                           ($blns)             ($blns)    
 All Equity Funds          -8.257    -0.11     7,310.433  12,310
 Domestic Equities         -6.356    -0.12     5,136.138  8,761
 Non-Domestic Equities     -1.902    -0.09     2,174.295  3,549
 All Taxable Bond Funds    -1.798    -0.06     2,781.327  6,068
 All Money Market Funds    -0.244    -0.01     2,306.042  1,000
 All Municipal Bond Funds  -0.189    -0.04     433.533    1,457
 
 (Reporting by Trevor Hunnicutt
Additional reporting by James Thorne
Editing by Tom Brown and Richard Chang)
  
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