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Investors continue streak of moving away from U.S. equity funds
July 5, 2017 / 8:10 PM / 3 months ago

Investors continue streak of moving away from U.S. equity funds

    By David Randall
    NEW YORK, July 5 (Reuters) - U.S. investors took $4.38
billion out of mutual funds and exchange-traded funds that focus
on domestic equities in the week that ended June 28, the second
straight week of outflows as U.S. stock indices remained near
record highs, Investment Company Institute data showed on
Wednesday.
    At the same time, investors moved $6.74 billion into
international equity funds, a slight decline from the $8.56
billion invested in the category the week before. U.S. bond
funds took in $5.38 billion, continuing an unbroken streak of
positive weekly inflows for the year to date. 
    U.S. stocks "are not unduly expensive, but there are better
values to be found elsewhere," said Alan Gayle, head of asset
allocation at RidgeWorth Investments, which has $40.2 billion in
assets under management. 
    The benchmark S&P 500 index trades at a price-to-earnings
ratio of 21.4, according to Thomson Reuters data, near the high
end of its historical range, and investors have questioned
whether the Trump Administration will be able to deliver on its
promise of tax cuts and infrastructure spending that helped
boost stocks in the wake of the U.S. presidential election in
November. 
    The move away from U.S. stocks continues a year-long trend
in which investors continue to favor bonds over domestic
equities. Overall, investors pulled $12.4 billion out of U.S.
stock and ETF equity funds between January and the end of May,
according to Investment Company Institute data. Bond funds,
meanwhile, saw $170.16 billion in inflows over the same time
period. 
    The following table shows estimated ICI flows for mutual
funds and exchange-traded funds (all figures in millions of
dollars):
                6/28/17   6/21/17    6/14/17    6/7/17  5/31/17
 Equity           2,353       684     27,288    -7,726   13,999
    Domestic     -4,382    -7,876     19,624   -11,093    8,482
    World         6,735     8,560      7,664     3,367    5,517
 Hybrid            -578      -417       -753      -861     -266
 Bond             5,381     6,256      7,665    13,621    4,919
    Taxable       4,438     5,334      7,089    12,305    4,674
    Municipal       943       922        576     1,316      245
 Commodity          394        90         65       997     -458
 Total            7,550     6,614     34,264     6,030   18,193
 
 (Reporting by David Randall; Editing by Jennifer Ablan and
David Gregorio)
  

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