July 10, 2019 / 3:48 PM / 11 days ago

Investors pull largest amount from U.S. stock funds since 2014

    By David Randall
    NEW YORK, July 10 (Reuters) - U.S. investors pulled the
largest net amount of assets from mutual funds and
exchange-traded funds that hold domestic stocks in more than
five years last week even as the U.S. equity market hit record
highs, according to data released Wednesday by the Investment
Company Institute. 
    The roughly $25.1 billion in net outflows from domestic
stock funds was the largest since the $25.2 billion pulled from
the category during the week that ended Feb. 5, 2014. Over the
last two weeks, investors have pulled approximately $30.6
billion from U.S. stock funds. 
    At the same time, the benchmark S&P 500 index has notched
several record highs, bolstered in large part by expectations of
an equity-friendly interest rate cut by the Federal Reserve by
the end of the year. The S&P 500 traded above 3,000 for the
first time Wednesday after Federal Reserve chief Jerome Powell
said that the central bank would "act as appropriate" to sustain
record U.S. growth.
    "It's surprising to see outflows accelerate because we had a
very strong U.S. equities market in the first half of the year
and investors have historically put money to work when markets
have rallied," said Todd Rosenbluth, director of ETF and mutual
fund research at New York-based research firm CFRA. 
    While some of the outflows could be attributed to mid-year
rebalancing, "it's a sign that investors are getting more
nervous about what's ahead for equity markets in the second half
of the year as concerns about a slowing U.S. economy grow,"
Rosenbluth added. 
    Fixed income funds continued to attract investor dollars.
Taxable and municipal debt funds brought in $10.4 billion in new
assets last week, continuing a streak of positive inflows into
the category over every full week of the year to date. 
    World stocks, meanwhile, lost $3.6 billion in net outflows,
continuing a six week streak in which the category has lost
$11.6 billion in assets. 
    
    The following is a broad breakdown of the flows for the
week, including mutual funds and exchange-traded funds: 
    
              7/2/2019  6/26/2019  6/19/20  6/12/201  6/5/2019
                                        19         9  
 Equity        -28,759     -8,830   10,121     5,039    -9,636
    Domestic   -25,153     -5,417   11,676     6,195    -8,210
    World       -3,606     -3,413   -1,555    -1,156    -1,427
 Hybrid           -560     -1,947     -156    -1,282    -1,017
 Bond           10,440     10,528    7,932    11,934     4,614
    Taxable      8,814      8,011    6,342    10,653     3,154
    Municipa     1,626      2,517    1,590     1,281     1,460
    l                                                 
 Commodity         143      1,703      389       317       681
 Total         -18,735      1,454   18,285    16,008    -5,359
 

    
    

 (Reporting by David Randall
Editing by Susan Thomas)
  
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