Investors withdrew $1.85 billion from US-based equity funds in the week ended Wednesday despite strong stock market performance during the same period, according to Lipper data released on Thursday. The data showed $1.46 billion was withdrawn from US-based equity mutual funds and $387 million from US-based equity exchange traded funds in the latest week.
This is the sixth straight week US equity funds have experienced cash withdrawals, Lipper data showed. In the run-up to second-quarter earnings, fund investors "bet on the fact that the trade wars are going to get worse," said Tom Roseen, head of research services at Thomson Reuters Lipper.
The S&P 500 posted four straight days of gains before slipping on Wednesday following reports of additional US tariffs on Chinese goods. Investors' risk aversion was evident in the demand seen for safer US government and money market funds.
US-based government-Treasury bond funds attracted $494 million during the period, Lipper said. Fund investors deposited $21 billion in US-based money market funds, the largest net deposit since early June. Some opportunistic buying also took place. US-based high-yield bond funds saw more demand than their investment-grade counterparts, attracting $1.85 billion for the week ended Wednesday, following three consecutive weeks of outflows, according to Lipper data.
Investors withdrew $2.86 billion from US-based corporate investment-grade bond funds during the period, breaking a streak of weekly inflows since March, Lipper said.