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Investors Withdraw Most Money from US Stock Funds Since October

Investors Withdraw Most Money from US Stock Funds Since October

(Dreamstime)

Wednesday, 01 February 2017 02:48 PM

Investors pared back their exposure to stocks in the latest week, Investment Company Institute data for U.S.-based funds showed on Wednesday, treating any "Trump rally" with a dose of caution.

Stock funds invested primarily in U.S. companies posted their largest outflows since October as $8.2 billion cascaded out during the seven days through Jan. 25, the trade group's data showed.

The withdrawals came as a leap forward for U.S. stocks after the November U.S. presidential election in recent weeks turned into more of a totter. The Russell 2000 index, for instance, returned 16 percent in the month after the election only to sag about 2 percent since then.

The Dow Jones Industrial Average topped 20,000 for the first time last week, but held above that level for just three days. U.S. President Donald Trump, who took office last month, and his Republican party have touted potential new economic stimulus measures, such as tax cuts and infrastructure spending.

"We do have a very unusual administration coming in terms of the agenda and probably the lack of clarity around the specifics of that agenda," said Francis Rodilosso, head of fixed income exchange-traded fund portfolio management at Van Eck Associates Corp.

Michael LaBella, a portfolio manager at QS Investors LLC, said milestones like Dow 20,000 offered a hint that the environment, or market cycle, is changing.

"We hit new highs at the end of cycles, not at the start, so to us we see this as a great time to diversify equity exposure into international, things that have not done well the last five, seven years," said LaBella.

U.S.-based funds invested in international shares attracted $4.3 billion in their eighth straight week of positive flows, ICI's data showed. Investors continued to take refuge in bonds, pumping nearly $8.2 billion into fixed-income funds during the latest week.

© 2021 Thomson/Reuters. All rights reserved.


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Investors pared back their exposure tostocks in the latest week, Investment Company Institute data forU.S.-based funds showed on Wednesday, treating any Trump rally with a dose of caution.
fund, stocks, investing, withdrawal
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2017-48-01
Wednesday, 01 February 2017 02:48 PM
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