April 7, 2017 / 12:12 AM / 3 months ago

UPDATE 1-U.S. stock funds' weekly outflow largest in 2017 -Lipper

4 Min Read

 (Adds details on mutual funds and ETFs, analyst quote, table,
byline)
    By Trevor Hunnicutt
    NEW YORK, April 6 (Reuters) - Investors yanked the most
money from U.S.-based equity funds since December during the
latest week, Lipper data showed on Thursday, as they feared
stocks may be overpriced given the many roadblocks in
implementing U.S. President Donald Trump's economic policies.
    Nearly $12 billion drained from the stock funds in the seven
days through April 5, including $7 billion SPDR S&P 500 ETF
, a fund actively traded by investors ranging from
institutional investors making speculative bets to retail
buyers.
    Trump's plans to cut taxes and regulations while boosting
infrastructure spending lifted the shares of industrial
companies, banks and the smallest publicly traded firms for
weeks after his Nov. 8 election. But all three categories lagged
the S&P 500 in the first quarter as investors lost
confidence that Trump could fulfill his agenda.
    Stock mutual funds, used extensively by retail investors,
also continued a streak of net outflows that has lasted the
better part of the last two years. The outflow totaled $7.4
billion during the week.
    By contrast, U.S.-based funds invested in stocks abroad took
in $1.1 billion during the week, the data showed.
    "There's a whole lot of uncertainty right now, which is
never good for the equity markets," said Pat Keon, senior
research analyst for Thomson Reuters Lipper.
    Keon said the United States' response to conflict in Syria
and North Korea has intensified jitters over policy even though
market returns have been strong.
    Matthew Bartolini, head of SPDR Americas Research at State
Street Global Advisors, said outflows likely include
both long-term investors who are trimming their winning bets and
shorter-term investors shifting to other markets.
    Investors' worries also included March U.S. auto sales data,
which this week came in below expectations.
    And U.S. House of Representatives Speaker Paul Ryan said
President Donald Trump's promised tax reform, which has boosted
equities markets, would take longer to accomplish than a failed
attempt this year to reform healthcare.
    Moreover, minutes of the U.S. Federal Reserve's March
meeting, released on Wednesday, showed policymakers weighing
plans to reduce the central bank's massive holdings totaling
$4.5 trillion.
    During the latest week, financial sector funds posted $387
million in withdrawals. Technology, which lagged financials
considerably after the election, attracted $409 million in their
largest week of inflows since February, according to Lipper.
    U.S-based taxable-bond funds pulled in  $4.3 billion in
their third straight week of inflows, the research service said.
High-yield funds gathered $2.4 billion after facing withdrawals
last month.
    The following is a broad breakdown of the flows for the
week, including mutual funds and exchange-traded funds:
 Sector                    Flow Chg  % Assets  Assets     Count
                           ($blns)             ($blns)    
 All Equity Funds          -11.896   -0.21     5,741.072  11,669
 Domestic Equities         -12.985   -0.32     4,071.843  8,344
 Non-Domestic Equities     1.089     0.06      1,669.229  3,325
 All Taxable Bond Funds    4.257     0.18      2,390.588  5,889
 All Money Market Funds    4.121     0.18      2,317.397  1,020
 All Municipal Bond Funds  -0.287    -0.08     372.734    1,405
 
 (Reporting by Trevor Hunnicutt; Editing by Jennifer Ablan and
Richard Chang)
  

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