Record highs not enough to lure fund investors to U.S. stocks

David Randall

NEW YORK, Nov 6 (Reuters) - U.S. investors last week pulled $4.1 billion from mutual funds and exchange-traded funds that hold domestic stocks, extending a pullback from the U.S. equities market that has now lasted for five of the last six weeks, according to data released Wednesday by the Investment Company Institute. The withdrawals came during a week in which the Federal Reserve continued its pace of equity-friendly interest rate cuts, helping propel the benchmark S&P 500 to record highs. Yet concerns over the trade war between the United States and China and the possibility of a recession over the next 12 months have weighed on investor sentiment, pushing investors into the perceived safety of bonds. For the year to date, investors have pulled nearly $118.5 billion from U.S. stock funds. Over the same time, bond funds have brought in nearly $366.1 billion in new assets despite yields that are historically low. The $11.3 billion investors deposited into the category last week continued a winning streak for bond funds that began in early August. World stock funds, meanwhile experienced approximately $2.7 billion in outflows, the largest weekly drop since late August. For the year to date, investors have pulled nearly $46 billion from the category.

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

10/30/20 10/23/20 10/16/2 10/9/201 10/2/201

19 19 019 9 9Equity -6,787 -5,659 755 -10,609 -13,429Domestic -4,100 -4,693 2,698 -9,964 -11,746World -2,687 -967 -1,943 -644 -1,682Hybrid -767 -168 -391 -688 -1,163Bond 11,300 10,419 10,473 5,810 8,427Taxable 9,635 8,275 8,786 3,856 6,810Municipal 1,665 2,144 1,687 1,954 1,617Commodity -319 222 -151 425 489Total 3,427 4,814 10,686 -5,061 -5,676

(Reporting by David Randall)