September 12, 2018 / 4:28 PM / 7 days ago

U.S. mutual fund investors flee domestic stocks in latest week: ICI

NEW YORK (Reuters) - U.S. mutual-fund investors sprinted out of domestic stocks at the fastest pace in nine weeks as trade talks seemed to deteriorate and social media executives were grilled by lawmakers, Investment Company Institute (ICI) data showed on Wednesday.

Mutual fund investors pulled $8.1 billion from domestic stock funds during the week ended Sept. 5, while exchange-traded funds (ETFs) focused on the same market attracted $1.1 billion, the trade group said.

ETFs are heavily trafficked by quick-trading investors while mutual funds are more exclusively used by long-term retail investors.

During the latest week, Canada and the United States concluded trade talks without resolution, a report suggested that the United States could impose even more tariffs on Chinese goods and Facebook Inc and Twitter Inc executives defended their companies before skeptical U.S. lawmakers.

Despite record-high U.S. corporate earnings, investors remain skittish around domestic stocks.

Overall, including both mutual funds and ETFs, bond funds attracted $3.5 billion, marking their 29th straight week pulling in cash. Stock funds posted $5.5 billion in withdrawals, the lowest figure in nine weeks, according to the ICI.

Closely watched bond fund manager Jeffrey Gundlach on Tuesday said global economic growth is slowing, but stopped short of calling for a recession. He said he would avoid putting new money in the market into the S&P 500 despite its relatively strong performance versus international indexes.

Commodity funds, including those invested in gold, recorded $411 million in withdrawals. It is the sixth straight week of outflows for those products and comes as a rising dollar this year has hurt demand for gold, which is priced in dollars.

Reporting by Trevor Hunnicutt; Editing by James Dalgleish

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