September 28, 2017 / 11:25 PM / a year ago

UPDATE 1-Gold and cash reign as U.S. fund investors pare stocks -Lipper

 (Adds details on mutual funds and ETFs, analyst quote, table,
    By Trevor Hunnicutt
    NEW YORK, Sept 28 (Reuters) - U.S. fund investors gorged on
gold and traded stocks for cash during the latest week, showing
caution even as markets trend higher, Lipper data showed on
    More than $16 billion took shelter in low-risk, U.S.-based
money-market funds during the seven days through Sept. 27, the
research service's data showed. Precious metals commodities
funds, which invest in gold and similar assets, took in $977
million, the most since July 2016.
    Stock mutual funds and exchange-traded funds, by contrast,
posted $9.7 billion of withdrawals, Lipper said. That counts as
the largest outflows for that group of funds since June.
    "People were taking risk off from the high-flying stocks,"
said Tom Roseen, head of research services for Thomson Reuters'
Lipper unit.
    The U.S. Federal Reserve last week signaled it still expects
one more rate hike by the end of the year despite a bout of low
inflation that Fed Chair Janet Yellen called "a mystery."
Aggressive rate rises could dent stock valuations.
    Roseen said investors shifted into less-loved areas of the
market, including banks that can benefit from higher interest
levels by lending at higher rates.
    "This can actually be seen as a healthy move," said Roseen.
    Financial and bank sector stock funds attracted $599 million
during the week, the most since July, according to Lipper.
    President Donald Trump on Wednesday put forward a U.S. tax
reform plan investors have been anticipating since his 2016
presidential victory, calling for tax cuts for most Americans,
but prompting criticism that the plan favors business and the
rich and could add trillions of dollars to the deficit.

    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          -9.666    -0.15     6,355.842  12,153
 Domestic Equities         -9.800    -0.23     4,357.372  8,661
 Non-Domestic Equities     0.134     0.01      1,998.470  3,492
 All Taxable Bond Funds    0.452     0.02      2,564.958  6,086
 All Money Market Funds    16.114    0.63      2,582.402  1,072
 All Municipal Bond Funds  0.378     0.09      397.847    1,472
 (Reporting by Trevor Hunnicutt; Editing by Leslie Adler and
Jennifer Ablan)
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