By Sam Forgione
NEW YORK (Reuters) – Investors pulled $14.8 billion out of U.S.-based stock funds in the week ended May 6, marking the biggest outflows since mid-December, data from Thomson Reuters’ Lipper service showed on Thursday.
The outflows also marked the first investor withdrawals from the funds in four weeks. The withdrawals were from funds that specialize in U.S. shares, which posted $17.4 billion in outflows, their biggest since August 2014.
“It was a risk-off week,” said Jeff Tjornehoj, head of Lipper Americas Research, a Thomson Reuters research unit.
Federal Reserve Chair Janet Yellen said on Wednesday that high equity valuations could pose potential dangers, but stability risks across the U.S. financial system remained in check.
“I would highlight that equity market valuations at this point generally are quite high,” Yellen said. “There are potential dangers there.”
Recent U.S. economic data have also shaken investors. On Wednesday, the ADP National Employment Report showed U.S. private employers boosted payrolls by 169,000 in April, the smallest gain since January 2014 and below economists’ forecasts for an increase of 200,000.
Also reported this week, the U.S. trade deficit in March swelled to the highest level in more than six years, bolstered by a flood of imports that might have sapped the U.S. economy of any growth in the first quarter.
“I think people have been surprised at how the first quarter has been weak economically, when they look at the recent data,” Tjornehoj said.
For their part, U.S.-based non-domestic-focused stock funds attracted $2.6 billion of inflows, the group’s 13th straight week of inflows, Lipper data show.
U.S.-based European stocks funds attracted $211 million of net cash, their 15th week of inflows, according to Lipper data. U.S.-based emerging markets equity funds also posted inflows in the latest week with $4 million of inflows, the sector’s seventh week of net inflows, Lipper added.
Taxable bond funds posted $3 billion in outflows to also mark their biggest weekly outflows of the year. The withdrawals were the first from the funds in eight weeks.
High-yield junk bonds posted cash withdrawals of $2.7 billion in the latest week, their biggest outflows of the year, Lipper said.
U.S.-based money market funds attracted $4.7 billion of inflows, the sector’s first inflows in six weeks.
(Reporting by Sam Forgione; Editing by Jennifer Ablan and Andre Grenon)