July 12, 2017 / 6:26 PM / a month ago

Weekly U.S. stock fund flows deteriorate, lowest since April -ICI

    By Trevor Hunnicutt
    NEW YORK, July 12 (Reuters) - Investors pulled $11.6 billion
from domestic U.S. stock funds during the latest week, the most
cash to flee the funds in three months, according to Investment
Company Institute (ICI) data on Wednesday.
    The domestic stock fund withdrawals during the week ended
July 5 were the largest since early April. That turned overall
mutual fund and exchange-traded fund flows negative for only the
second time this year and the first time since January, the
trade group said.
    David Lafferty, chief market strategist at Natixis Global
Asset Management, said U.S. stocks were expensive and investors
were no longer willing to "bet the farm" on further gains.
    "It's frustrating for investors right now," said Lafferty,
noting that stock market volatility measured by indexes such as
the CBOE Volatility Index remained below its historical
average even as monetary policymakers plan to withdraw
unprecedented levels of stimulus.
    "Everybody seems to know the world is risky, but the market
is telling them it's not risky."
    During the week, U.S. bond yields rose as more hawkish
comments from central bankers signaled an end to ultra-loose
monetary policy in Europe and the United States. Bond prices
fall as their yields rise.
    Still, nearly $5.1 billion moved into world stock funds and
$6.1 billion pivoted into taxable bond funds, marking a 31st
straight week of inflows for both categories, according to ICI.
    Municipal bond funds recorded $250 million in outflows,
their first week of withdrawals since March, the trade group
said. Investors pulled $583 million from commodity funds,
including those invested in gold. Rising bond yields reduce
demand for precious metals, which pay no interest.
    The following table shows estimated ICI flows for mutual
funds and exchange-traded funds (all figures in millions of
dollars):
                 7/5    6/28    6/21    6/14  6/7/2017
 Equity       -6,478   2,143     684  27,159    -7,726
 -Domestic   -11,551  -4,571  -7,876  19,492   -11,093
 -World        5,073   6,714   8,560   7,667     3,367
 Hybrid         -481    -614    -488    -813      -918
 Bond          5,824   5,404   6,313   7,621    13,675
 -Taxable      6,073   4,460   5,391   7,045    12,359
 -Municipal     -250     943     922     576     1,316
 Commodity      -583     394      90      65       997
 Total        -1,719   7,327   6,600  34,033     6,027
 
 (Reporting by Trevor Hunnicutt; Editing by Bernadette Baum)
  

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