October 3, 2018 / 4:19 PM / 2 months ago

U.S. stock, bond fund demand wanes over trade conflict -ICI

    NEW YORK, Oct 3 (Reuters) - Sales of U.S.-based stock and
bond funds slumped on worries about trade during the latest week
while demand for international equities fell to its lowest
levels since June, Investment Company Institute (ICI) data
showed on Wednesday.
    During that week, the Trump administration slapped 10
percent duties on another $200 billion of Chinese goods,
including many consumer products, after China retaliated against
U.S. tariffs on $50 billion in Chinese technology-focused
imports.
    The trade strife highlighted gaps between a powerful
resurgence in U.S. corporate profits as international economies
have turn in mixed performance. And the U.S. Federal Reserve
continues to set aside those concerns as it withdraws stimulus
from the economy in an effort to ward off inflation.
    U.S. fund investors walloped international stock mutual
funds and exchange-traded funds (ETFs) with $2.1 billion in net
withdrawals during the week ended Sept. 26, the most cash pulled
from that group of funds since June this year, according to the
ICI trade group. Domestic stock funds attracted $942 million.
    Overall, U.S.-based stock funds recorded a fourth week of
withdrawals in the last five weeks. Bond funds attracted just
$1.7 billion, weaker than its $5 billion-per-week average this
year, as money rolled out of municipal bond funds for the first
time since May.
    The end of the third quarter will offer investors new data
on the health of the U.S. market's near-decade long rally, with
corporate results due in the coming weeks.
    Commodity funds, including those invested in gold, pulled in
$253 million, a rare respite for a category that has been under
assault for most of this year. The dollar has backed off its
swift summertime price gains, helping gold, which is
priced in greenback.
    The following table shows estimated ICI flows for mutual
funds and ETFs (all figures in millions of dollars):
               9/26    9/19    9/12    9/5     8/29/2018
 Equity        -1,170  10,194  -3,371  -5,551  -570
    Domestic   942     10,545  -3,830  -7,011  -413
    World      -2,112  -351    459     1,461   -158
 Hybrid        -1,767  -1,297  -1,691  -1,762  -1,362
 Bond          1,673   4,339   7,206   3,519   4,414
    Taxable    2,058   4,223   7,177   3,515   4,141
    Municipal  -385    116     30      4       273
 Commodity     253     -91     -57     -411    -388
 Total         -1,011  13,145  2,088   -4,204  2,094
 
 (Reporting by Trevor Hunnicutt; Editing by Andrea Ricci)
  
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