June 12, 2019 / 6:16 PM / 2 months ago

Investors retreat further from U.S. stock funds as trade tensions mount -ICI

    By David Randall
    NEW YORK, June 12 (Reuters) - Investors extended their
retreat from the U.S. stock market by pulling nearly $8.2
billion out of mutual funds and exchange-traded funds that hold
domestic equities last week, according to data released on
Wednesday by the Investment Company Institute (ICI).
    The declines came amid the Trump administration's threats to
impose 5% import tariffs on all Mexican goods starting on Monday
June 10. The United States and Mexico struck a deal to avert the
tariffs but concerns still remained about the lingering
U.S.-China trade war.  
    Worries about the health of the global economy and
persistent low inflation have led financial markets to brace for
interest rate cuts as soon as this summer by the Federal
Reserve. 
    Net withdrawals from U.S. equity funds last week were almost
double the $4.4 billion pulled out the week before, and the
largest since the $9.5 billion lost during the week that ended
May 15. For the year to date, investors have pulled nearly $48.5
billion from U.S. stock funds. 
    Bond funds, meanwhile, continued to attract new investor
dollars. Taxable and municipal debt funds pulled in a net of
$4.7 billion last week, adding to the $181.9 billion bond funds
have brought in since the beginning of the year. 
    World stock funds shed nearly $1.5 billion in assets last
week, bringing the category's year to date decline to nearly $7
billion. 
    
    The following is a broad breakdown of the flows for the
week, including mutual funds and exchange-traded funds: 
    
                         6/5     5/29     5/22     5/15      5/8
 Equity               -9,675   -4,714    3,827  -11,397   -8,305
          Domestic    -8,191   -4,412    3,722   -9,569  -10,162
          World       -1,484     -302      105   -1,828    1,857
 Hybrid               -1,017   -1,191     -736     -985     -837
 Bond                  4,656    3,026    4,565    1,680    7,592
          Taxable      3,226    1,402    2,486     -138    5,261
          Municipal    1,430    1,624    2,078    1,819    2,331
 Commodity               681      157      178     -708     -745
 Total                -5,355   -2,721    7,834  -11,409   -2,294
 

 (Reporting by David Randall; editing by Jennifer Ablan and Tom
Brown)
  
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