December 27, 2016 / 6:08 AM / 2 years ago

U.S.-based stock funds post $21.6 billion withdrawals during week: Lipper

NEW YORK (Reuters) - U.S.-based stock funds posted $21.6 billion in withdrawals during the latest week, Lipper data showed on Thursday, adding to a trend of outflows from actively managed mutual funds that has lasted much of the year.

Taxable bond funds recorded $2 billion in outflows during the latest week, the data through Dec. 21 showed, a smaller level of withdrawals than the $5.8 billion pulled the week prior.

Investors have pulled money from stock mutual funds despite a strong rally since the U.S. presidential election. The stock gains are based on a premise that President-elect Donald Trump will enact policies that spur infrastructure spending and inflation while cutting financial regulatory red tape.

As a result, U.S. stock prices have helped push the Dow Jones Industrial Average within arm’s reach of the 20,000 milestone.

While benchmark indexes have gained ground, the Lipper data nonetheless showed a 41st consecutive week of withdrawals from stock mutual funds, many of which are actively run by portfolio managers seeking to beat the market.

Many exchange-traded funds, which merely track a market index, have been attracting money this year. But in the latest week, as investors settle up portfolios for year-end accounting, these funds also suffered net withdrawals.

The data this past week may overstate the degree of outflows because of end-of-year payouts by funds that are typically then reinvested quickly and will likely show up in future weeks as an inflow, a Thomson Reuters Lipper analyst said.

Reporting by Trevor Hunnicutt; Editing by Andrew Hay and Will Dunham

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