June 14, 2018 / 11:41 PM / 6 months ago

UPDATE 1-U.S. fund investors pull nearly $10 bln from stocks in week -Lipper

 (Adds details on funds, analyst quote, byline, table)
    By Trevor Hunnicutt
    NEW YORK, June 14 (Reuters) - U.S. fund investors snatched
$9.7 billion out of stocks during the latest week, marking the
largest withdrawals since early April, according to Lipper data
on Thursday.
    The withdrawals put more pressure on emerging markets as
well. The research service's data covers the seven days through
June 13, closing out on the same day that the U.S. Federal
Reserve raised interest rates.
    The Fed on Wednesday also dropped its pledge to keep rates
low enough to stimulate the economy "for some time," and
signaled a slightly faster pace of rate increases in the coming
months, with two additional hikes expected by the end of this
year, compared to one previously.
    U.S. financial sector funds seen as benefiting from higher
rates pulled in $793 million, the most since February.
    Tensions between the United States and its trading partners
threaten to shake the market's calm.
    U.S. President Trump has made up his mind to impose "pretty
significant" tariffs on Chinese goods, an administration
official said on Thursday, as Beijing warned that it was ready
to respond if Washington chose to ratchet up trade tensions.

    "We had strong returns this week, but the mutual fund and
[exchange-traded fund] investors weren't buying it," said Tom
Roseen, head of research services for Thomson Reuters' Lipper
unit.
    "I don't think it's concerning at all but it tells us
investors were taking some of that hard-won profit off the
table."
    MSCI's emerging markets index is down nearly
3 percent this year, while the S&P 500 in the United
States has delivered a positive 5 percent total return.
    Dollar strength and tighter monetary policy have highlighted
weaknesses in economies from Brazil to Argentina and Turkey,
including questions about whether they can honor debts
denominated in dollars that are growing harder to come by.
    U.S.-based funds that invest primarily in emerging market
stocks are on course for a second straight month of withdrawals
and first quarter of outflows since 2016. More than $1.1 billion
rolled out of the products during the latest week.
    "Some people are concerned with global growth, but the Fed
does have room as far as the U.S. economy goes," said Roseen.
    The following is a breakdown of the flows for the week,
including mutual funds and ETFs:
 Sector                    Flow Chg  % Assets  Assets     Count
                           ($blns)             ($blns)    
 All Equity Funds          -9.700    -0.13     7,554.717  12,329
 Domestic Equities         -6.547    -0.12     5,262.009  8,774
 Non-Domestic Equities     -3.153    -0.14     2,292.707  3,555
 All Taxable Bond Funds    1.006     0.04      2,785.101  6,082
 All Money Market Funds    -18.076   -0.66     2,726.730  1,038
 All Municipal Bond Funds  0.450     0.10      430.724    1,468
 
 (Reporting by Trevor Hunnicutt
Editing by Leslie Adler)
  
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