Investors retreat further from U.S. stock funds as trade tensions mount -ICI

Investors extended their retreat from the U.S. stock market by pulling nearly $8.2 billion out of mutual funds and exchange-traded funds that hold domestic equities last week, according to data released on Wednesday by the Investment Company Institute (ICI).

By David Randall

NEW YORK, June 12 (Reuters) - Investors extended their retreat from the U.S. stock market by pulling nearly $8.2 billion out of mutual funds and exchange-traded funds that hold domestic equities last week, according to data released on Wednesday by the Investment Company Institute (ICI).

The declines came amid the Trump administration's threats to impose 5% import tariffs on all Mexican goods starting on Monday June 10. The United States and Mexico struck a deal to avert the tariffs but concerns still remained about the lingering U.S.-China trade war.

Worries about the health of the global economy and persistent low inflation have led financial markets to brace for interest rate cuts as soon as this summer by the Federal Reserve.

Net withdrawals from U.S. equity funds last week were almost double the $4.4 billion pulled out the week before, and the largest since the $9.5 billion lost during the week that ended May 15. For the year to date, investors have pulled nearly $48.5 billion from U.S. stock funds.

Bond funds, meanwhile, continued to attract new investor dollars. Taxable and municipal debt funds pulled in a net of $4.7 billion last week, adding to the $181.9 billion bond funds have brought in since the beginning of the year.

World stock funds shed nearly $1.5 billion in assets last week, bringing the category's year to date decline to nearly $7 billion.

The following is a broad breakdown of the flows for the week, including mutual funds and exchange-traded funds:

6/5

5/29

5/22

5/15

5/8

Equity

-9,675

-4,714

3,827

-11,397

-8,305

Domestic

-8,191

-4,412

3,722

-9,569

-10,162

World

-1,484

-302

105

-1,828

1,857

Hybrid

-1,017

-1,191

-736

-985

-837

Bond

4,656

3,026

4,565

1,680

7,592

Taxable

3,226

1,402

2,486

-138

5,261

Municipal

1,430

1,624

2,078

1,819

2,331

Commodity

681

157

178

-708

-745

Total

-5,355

-2,721

7,834

-11,409

-2,294

(Reporting by David Randall; editing by Jennifer Ablan and Tom Brown)

((David.Randall@thomsonreuters.com; +1-646-223-6607; Reuters Messaging: david.randall.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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