September 27, 2018 / 10:49 PM / 21 days ago

UPDATE 1-U.S. fund investors move to domestic stocks for 3rd straight week

 (Adds details on funds, analyst quote)
    By Trevor Hunnicutt
    NEW YORK, Sept 27 (Reuters) - U.S. fund investors rotated
from international to domestic stocks for a third straight week,
showing continued signs of risk aversion given a potential trade
war and uncertainty over U.S. monetary policy, Lipper data
showed on Thursday.
    Investors pulled $2.2 billion from non-domestic equity funds
and added $1.6 billion to their counterparts that buy shares in
the United States, according to the data, which covers mutual
funds and exchange-traded funds (ETFs) in the week through Sept.
26.
    High-yield bond funds, which often trade in sympathy with
stocks, posted $1.6 billion in withdrawals, the most since July.
Low-risk money market funds pulled in $16.6 billion. 
    "There is a concern that the tariffs are going to cause more
havoc than we've actually anticipated," said Tom Roseen, head of
research services at Thomson Reuters' Lipper unit. "Before,
people thought it was posturing."
    After China retaliated against U.S. tariffs on $50 billion
in Chinese technology-focused imports, the Trump administration
on Monday slapped 10 percent duties on another $200 billion of
Chinese goods, including many consumer products.
    The trade strife has highlighted gaps between a powerful
resurgence in U.S. corporate profits while international
economies have turned in more mixed performance.
    The U.S. Federal Reserve raised interest rates on Wednesday,
citing strong U.S. economic performance, largely setting aside
the threats of rising tariffs. Investors continue
to wonder just how quickly rates will rise and whether the
tighter policies will pull investment away from international
markets.
    Some investors did take advantage of an apparent buying
opportunity in markets challenged by trade friction, depositing
$439 million into emerging market debt funds, the most since
January. Funds based in the United States but invested primarily
in Chinese stocks collected $276 million during the week.
    Healthcare sector funds pulled in $921 million, the most
since June, capping its rise as more defensive sectors have
attracted more demand.
    The following is a breakdown of the flows for the week,
including mutual funds and ETFs:
 Sector                    Flow Chg  % Assets  Assets     Count
                           ($blns)             ($blns)    
 All Equity Funds          -0.582    -0.01     7,591.705  12,234
 Domestic Equities         1.628     0.03      5,407.535  8,684
 Non-Domestic Equities     -2.210    -0.10     2,184.170  3,550
 All Taxable Bond Funds    -0.177    -0.01     2,824.626  6,046
 All Money Market Funds    16.631    0.61      2,747.468  1,036
 All Municipal Bond Funds  -0.385    -0.09     427.167    1,431
 
 (Reporting by Trevor Hunnicutt; editing by Jonathan Oatis)
  
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