US fund investors withdrew billions from domestic stocks during the equity market's tariff tantrum, the Investment Company Institute (ICI) said on Wednesday, adding turbulence to a market that has shed its carefree attitude. Some $11 billion was liquidated from US-based domestic stock mutual funds and exchange-traded funds (ETFs) during the seven days ended March 7, according to the trade group, as US President Donald Trump announced plans to impose import tariffs on steel and aluminium. Fears of inflation stoked by rising wages, a falling dollar or a trade war sparked by the tariffs have kept markets on edge. Not only does inflation erode the value of cash, it could also force the US Federal Reserve to further raise rates and tighten monetary policy, slowing the economy.
That stew of concerns has made fund investors jumpier, with demand for domestic stock funds deteriorating overall and growing more fickle from week to week in 2018 compared to last year, the ICI data shows.
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