NEW YORK Aug 23 Investors worldwide withdrew
$14.3 billion from U.S. equity funds in the latest week, marking
the biggest weekly outflow from the funds since June 2008, data
from a Bank of America Merrill Lynch Global Research report
Nearly all of the outflows from U.S. equity funds in the
week ended Aug. 21 were from exchange-traded funds, the report
said, also citing data from fund-tracker EPFR Global.
Investors pulled $10 billion from the SPDR S&P 500 ETF Trust
alone, which tracks the performance of the benchmark S&P
500 index, the report said.
The benchmark stock index dropped 2.53 percent over the
weekly period as positive U.S. economic data reinforced fears
that the Federal Reserve will soon scale back its $85 billion of
monthly bond purchases.
U.S. stock markets fell over the week partly on hesitation
leading up to Aug. 21, when the Federal Open Market Committee,
the U.S. central bank's policy-setting group, released the
minutes of its July 30-31 meeting.
The minutes offered few clues on the timing of a reduction
in the Fed's bond-buying program, but also did not alter the
eventuality of such a reduction in stimulus. [ID: nL2N0GM1EC]
Stock funds overall had $12.3 billion in outflows, marking
the first outflows from the funds in eight weeks. Funds that
hold European stocks attracted $1.6 billion in new cash, marking
an eighth straight week of inflows.
The funds were popular even as the FTSEurofirst 300
index of top European shares fell 2.63 percent over the week.
Bond funds worldwide had outflows of $7.4 billion as yields
on benchmark U.S. Treasuries reached two-year highs. Investors
pulled $1.3 billion from emerging market bond funds, marking the
biggest outflow from the funds in five weeks, according to Bank
of America Merrill Lynch.
Rising interest rates in response to fears that the Fed will
reduce its stimulus are hurting emerging markets, which have
benefited from large cash inflows as a result of the Fed's and
other central banks' easy money policies.
Money market funds, which are low-risk vehicles that invest
in short-term securities, took in $22 billion in new cash over
the weekly period. It was the third straight week that investors
poured money into the funds.