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

U.S. fund investors pull most cash from stocks since February -ICI

    By Trevor Hunnicutt
    NEW YORK, July 5 (Reuters) - U.S. fund investors peeled out
of stocks, pulling the most cash since February in the most
recent week as global trade tensions vexed markets, Investment
Company Institute data showed on Thursday.
    Investors snatched $18 billion from U.S.-based equity funds,
according to the trade group's data for the week ended June 27.
That is the most since the turbulent week ended Feb. 7,
according to ICI's records.
    During that week earlier this year the Dow Jones Industrial
Average fell nearly 1,600 points in its biggest intraday
point drop in history as investors girded for a spike in
inflation and bond yields.
    Now, conflict between the United States and its trading
partners appears to be markets' biggest boogeyman.
Harley-Davidson Inc announced during the week it would
move production of motorcycles shipped to the European Union
from the United States to its international facilities and
forecast the trading bloc's retaliatory tariffs would cost the
company $90 million to $100 million a year.
    "Trouble stems from the fact that despite the Trump
administration's steadfast willingness to place tariffs on other
nations, there is no clear strategy as to the scope and timing
on the next wave of actions," said Matthew Bartolini, head of
SPDR Americas research at State Street Global Advisors, in a
note distributed on Thursday.
    "This groundswell of ambiguity has frayed investors'
nerves."
    The Trump administration's tariffs on $34 billion of Chinese
imports are due to go into effect on Friday.
    That has started to shake the foundations of a long run of
success for funds that invest in equities traded outside the
United States. Those funds took in cash from 79 straight weeks
starting in late 2016 only to have that streak broken this
month.
    The $5.4 billion that rolled out from those international
stock mutual funds and exchange-traded funds during the most
recent week is the most withdrawn since an August 2015 selloff
sparked by concerns about Chinese growth. U.S. fund investors
pulled $12.5 billion from domestic stocks in the most recent
week.
    Investors have turned to high-quality, short-dated debt for
safety. Bond funds attracted $3 billion during the recent
seven-day period, marking 19 straight weeks taking in cash, ICI
said.
    Commodity funds, including those invested in gold, faced a
fourth week of withdrawals. Demand for gold, which is priced in
dollars, has been pressured by the greenback's 4 percent rise
 over the last three months.
    The following table shows estimated ICI flows for mutual
funds and ETFs (all figures in millions of dollars):
                  6/27    6/20    6/13     6/6  5/30/2018
 Equity        -17,954  -5,157   6,773  -3,651      5,435
    Domestic   -12,541  -3,865   7,815  -4,532      4,702
    World       -5,413  -1,292  -1,042     881        734
 Hybrid         -1,213    -848  -1,975  -1,118       -643
 Bond            2,982   4,548   5,564   1,376      2,235
    Taxable      2,457   3,806   5,238     727      1,574
    Municipal      525     742     326     648        661
 Commodity        -612    -264    -416    -761        125
 Total         -16,797  -1,721   9,946  -4,155      7,152
 
 (Reporting by Trevor Hunnicutt
Editing by James Dalgleish)
  
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