June 28, 2018 / 11:10 PM / 3 months ago

U.S.-based equity funds post $20 billion outflows, most since Feb.: Lipper

NEW YORK (Reuters) - Investors in U.S.-based equity funds pulled $20 billion of cash in the week ended June 27, the largest outflows since February, according to Lipper data on Thursday, as concern over global trade tensions lingered.

Investors’ lack of risk-taking was also displayed in the credit markets. U.S.-based high-yield bonds, which move in sympathy with equities, posted $1.1 billion of cash withdrawals in the week ended June 27, in a second consecutive week of outflows, Lipper said.

U.S.-based equity mutual funds posted $8 billion of outflows in the week and U.S.-based equity exchange-traded funds posted $12 billion of cash withdrawals for the same period.

Pat Keon, senior research analyst at Thomson Reuters Lipper, said equity funds suffered their second-largest weekly net outflow of the year, fourth straight weekly outflow, and the sixth largest since Lipper began tracking the data in 1992.

“I think this is a function of the uncertainty we see in the markets caused by the trade tensions/potential trade war,” Keon said.

The lion’s share of the outflows from equity funds for this week of over $12 billion and the last four of more than $24.5 billion have come from equity exchange-traded funds, “which are typically more responsive to current market events than mutual funds,” Keon said.

Investors sought shelter in higher-quality bond funds, including money market, Treasury and investment-grade corporate bond funds. U.S.-based money market funds attracted more than $18 billion of new cash for the week, following two weeks of withdrawals, Lipper said.

U.S.-based government-Treasury bond funds attracted $781 million, their fourth consecutive week of inflows, according to Lipper data. U.S.-based corporate investment-grade bond funds attract $1.5 billion of new cash for week, extending weekly inflow streak since February, Lipper said.

Outside of the United States, U.S.-based international equity funds posted $6 billion of cash withdrawals for the week, their fifth consecutive week of outflows, according to Lipper.

U.S.-based emerging market equity funds posted about $1.8 billion in outflows for the week, their third consecutive week of cash withdrawals, according to Lipper data.

Reporting by James Thorne; Editing by Leslie Adler

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