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U.S. investors take shelter in foreign-stock and bond funds
March 29, 2017 / 6:44 PM / 8 months ago

U.S. investors take shelter in foreign-stock and bond funds

    By Trevor Hunnicutt
    NEW YORK, March 29 (Reuters) - Investors hesitated to take
more risk in the U.S. stock market, finding cover in bonds and
outside their home market during the latest week, Investment
Company Institute data showed on Wednesday.
    U.S.-based bond funds absorbed $13.2 billion, the most cash
since June 2015 in a 13th straight week of inflows, during the
week ended March 22, the trade group's data showed.
    Funds in the United States that buy stocks abroad attracted
$5.1 billion, their 16th straight week inhaling cash and longest
streak of fundraising since 2015.
    "We can't pay these high levels for growth we can't see,"
said Matthew Bartolini, head of SPDR Americas research at State
Street Global Advisors. 
    The S&P 500 was flat over the last month after choppy
trading followed a Federal Reserve interest rate hike and the
defeat of an Obamacare repeal effort viewed as foreshadowing
Washington's ability to deliver stock-boosting reforms such as
tax cuts.
    Domestic stock funds recorded $6.9 billion in withdrawals,
their first week of outflows in eight, ICI said.
    Bartolini said after the failed healthcare repeal effort he
is now wondering "which one of these Trump trades still have
room to run regardless of fiscal stimulus," referring to market
segments like small U.S. companies and industrials that
prospered after the November election of President Donald Trump
but have fizzled lately.
    Banks can thrive, he said, because they are trading cheaply
and because Trump can cut some financial regulations without
legislators' blessing.
    Investors pulled $1.3 billion from bank sector funds during
the week, earlier data from Lipper showed, the worst week of
outflows for those funds since July 2015.
    The following table shows estimated ICI flows, including
mutual funds and exchange-traded funds (all figures in millions
of dollars):
               3/22    3/15     3/8     3/1  2/22/2017
 Equity      -1,787  10,992   9,118   9,116      6,949
 -Domestic   -6,853   9,014   4,290   5,766      3,455
 -World       5,066   1,978   4,828   3,350      3,495
 Hybrid        -757    -242    -376    -912        -26
 Bond        13,190   2,837   6,921   9,707      6,787
 -Taxable    12,511   3,040   6,868   9,432      6,573
 -Municipal     679    -203      53     274        214
 Commodity     -151     237    -663     192         35
 Total       10,495  13,824  15,000  18,103     13,745
 (Reporting by Trevor Hunnicutt; Editing by Leslie Adler)

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