Fund investors tiptoe back into U.S. stocks on hopes for trade deal

David Randall

NEW YORK, Oct 23 (Reuters) - Investors tiptoed back into the U.S. stock market by adding nearly $2.7 billion into mutual funds and exchange traded funds last week, ending what had been the largest pullback from domestic equities by fund investors since 2013, according to Investment Company Institute data released on Wednesday. The inflows were the smallest weekly gain for U.S. stock funds since mid-July, and ended a three-week stretch in which investors pulled nearly $37 billion from the category. The shift came during a week in which U.S. President Donald Trump suspended a threatened tariff hike on Chinese goods, boosting investor sentiment that a deal to end the trade war between the world's two largest economies could be near. For the year to date, investors have pulled nearly $110 billion out of U.S. stock funds despite a rally in the benchmark S&P 500 that has put the index up nearly 20%. Instead, investors continued to pour money into bond funds. Taxable and municipal debt gained a total of nearly $10.5 billion in new assets, almost double the week before, which pushed the year-to-date gains for the category to $343 billion in assets. World stock funds, meanwhile, fell slightly more than $1.9 billion, their largest weekly loss since late August. For the year to date, investors have pulled slightly more than $42 billion from the category.

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

10/16/20 10/9/201 10/2/20 9/25/20 9/18/201

19 9 19 19 9Equity 754 -11,515 -13,494 -15,772 10,033Domesti 2,698 -10,868 -11,812 -13,957 11,804


World -1,944 -646 -1,682 -1,815 -1,770Hybrid -391 -688 -1,147 -1,918 -843Bond 10,472 5,809 8,418 6,864 9,290Taxable 8,786 3,856 6,803 4,587 8,902Municip 1,687 1,953 1,615 2,277 387


Commodity -151 425 489 2,356 260Total 10,685 -5,968 -5,734 -8,471 18,741

(Reporting by David Randall; Editing by Richard Chang)