Strong market performance failed to wow U.S.-based fund investors, who delivered stock funds another week of multi-billion dollar withdrawals, Lipper data showed on Thursday.
Investors pulled $4.5 billion from U.S.-based stock funds during the week that ended April 20, Lipper said, despite the funds' posting a 1 percent gain in market value over that period. The funds now have hemorrhaged nearly $51 billion since 2016 began, recording just three weeks this year during which they attracted more money than investors withdrew, the data show.
"People have no confidence," said Tom Roseen, head of research services at Thomson Reuters Lipper, a fund data service. He said fears connected to oil's dramatic price slide since 2014 have not fully abated, nor have concerns that strong equity performance is built on a weaker U.S. dollar this year and central-bank stimulus rather than durable corporate earnings. Funds focused on U.S. stocks posted $3.8 billion in outflows, their worst result since early February, while funds invested outside the country posted $654 million in outflows. Funds focused on Europe and Japan each posted their twelfth straight week of outflows. Bond funds based in the United States sounded a more optimistic tone, reeling in a third straight week of inflows during the week and netting $3.5 billion in new cash. High-credit debt funds attracted $1.4 billion in the week, while their more speculative high-yield counterparts took in $410 million.
Funds invested in bonds protected against rising inflation took in their eighth week of inflows.
Treasury funds, a safe haven, posted $280 million in outflows, their eighth consecutive week of outflows. Emerging markets were also a bright spot, with equity funds focused on those markets drawing $490 million in new money and bond funds taking in $198 million, according to Lipper. Financial and banking sector funds took in $162 million during the latest week after five straight weeks of outflows. Money-market funds posted $32 billion in outflows during the week. Roseen said those cash withdrawals were not surprising because the week coincided with filing deadlines for U.S. income taxes. The Lipper fund flow data is compiled from reports issued by U.S.-domiciled mutual funds and exchange-traded funds.
The following is a broad breakdown of the flows for the week, including exchange-traded funds (in $ billions):
Sector Flow Chg % Assets Assets Count
All Equity Funds -4.480 -0.09 5,217.463 11,980
Domestic Equities -3.826 -0.11 3,675.846 8,523
Non-Domestic Equities -0.654 -0.04 1,541.617 3,457
All Taxable Bond Funds 3.540 0.16 2,237.491 6,073
All Money Market Funds -32.000 -1.35 2,335.841 1,147
All Municipal Bond Funds 0.556 0.15 368.358 1,420