• Aug. 17, 2017, 10:25 am

U.S.-based domestic stock fund outflows biggest since July: ICI

By Sam Forgione

NEW YORK (Reuters) – Investors in U.S.-based mutual funds pulled $7.3 billion out of funds that specialize in U.S. shares in the week ended April 29 after some weak corporate earnings and economic data spurred profit-taking in U.S. shares, data from the Investment Company Institute showed on Wednesday.

The outflows were the biggest since early July of last year and marked the ninth straight week of withdrawals, according to the data from ICI, a U.S. mutual fund trade organization.

Funds that specialize in international shares attracted $4.1 billion to mark their 17th straight week of inflows, continuing a trend of stronger demand for European shares on the view that the European Central Bank’s stimulus program will help boost regional share prices. The latest inflows were down from the prior week’s, which were the biggest since January 2013.

Bond funds attracted $3.1 billion to mark their second straight week of inflows. Municipal bond funds attracted over $1 billion to mark their second straight week of inflows and their biggest since late January.

The benchmark U.S. S&P 500 stock index fell slightly over the weekly period after weaker-than-expected U.S. corporate results from companies such as Wynn Resorts and Humana Inc and data showing U.S. economic growth braked more sharply than expected in the first quarter.

“Given the fact that valuations are fairly rich at the moment, especially in the U.S., earnings really have to do well in order for U.S. equities to be propelled higher,” said Wayne Lin, portfolio manager at QS Investors in New York. He said investors were taking profits in U.S. shares.

Hybrid funds, which can invest in stocks and fixed income securities, posted $357 million in outflows. That marked their first investor withdrawals since early January.

(Reporting by Sam Forgione; Editing by Jennifer Ablan and Nick Zieminski)

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