May 25, 2017 / 11:07 PM / a year ago

UPDATE 1-U.S. fund investors hit stocks with 4th week of outflows -Lipper

 (Adds details on mutual funds and ETFs, analyst quote, table,
    By Trevor Hunnicutt
    NEW YORK, May 25 (Reuters) - U.S. fund investors offered a
skeptical perspective on sky-high equity prices, yanking cash
from U.S.-based stock funds for the fourth straight week, Lipper
data showed on Thursday.
    The funds recorded $10.1 billion in withdrawals during the
week that ended May 24, the second-largest outflows of the year,
offering little support to an equity market that has nonetheless
defied bearish predictions to chart record highs.
    The withdrawals came after the walloping for stocks on May
17 tied to reports that President Donald Trump tried to
interfere with a federal investigation. Stocks quickly recovered
from that selloff, with the benchmark Standard & Poor's 500
Index posting a record close on Thursday.
    Even so, fund investors carried scars.
    "People seem to be kind of concerned about the political
drama going on in the United States and embracing some of the
growth statistics coming out of Europe," said Tom Roseen, head
of research services for Thomson Reuters's Lipper unit.
    "They lightened up on some of the risker assets, but they
turned around and put the money to work on non-domestic."
    European stock funds pulled in $587 million in their 13th
straight week of inflows, which came the same week as a suicide
bombing at an Ariana Grande concert in the United Kingdom.

    Emerging market stock funds managed to gather $1.1 billion,
shaking off a massive selloff in Brazilian stocks last week and
Moody's Investors Service downgrading China's credit rating for
the first time in nearly 30 years.
    Strong earnings in the United States have helped give an
eight-year bull market another push higher.
    Yet the ratios of U.S. equity prices to estimated earnings
for the next year remain higher than those in the major
developed and emerging markets, according to Thomson Reuters
    That leaves little room for error in politics. Roseen said
the prospects for a deal in Washington on taxes and other
matters important to investors has receded.
    Taxable bonds attracted $2.4 billion during the week, Lipper
said. U.S.-based corporate investment-grade bond funds attracted
the bulk of those inflows, with $2.1 billion of new cash over
the weekly period, Lipper data showed. 
    The following is a broad breakdown of the flows for the
week, including mutual funds and exchange-traded funds:
 Sector                    Flow Chg  % Assets  Assets     Count
                           ($blns)             ($blns)    
 All Equity Funds          -10.052   -0.17     5,901.419  11,466
 Domestic Equities         -11.040   -0.27     4,125.976  8,209
 Non-Domestic Equities     0.987     0.06      1,775.444  3,257
 All Taxable Bond Funds    2.431     0.10      2,406.605  5,781
 All Money Market Funds    1.731     0.08      2,264.626  1,002
 All Municipal Bond Funds  0.394     0.10      381.319    1,393
 (Reporting by Trevor Hunnicutt; Editing by Jennifer Ablan and
Lisa Shumaker)
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