U.S. stock fund outflows largest since January: Lipper

Lackluster U.S. corporate results spurred investors to pull $11.2 billion from U.S.-based stock funds in the past week, the largest seven-day outflow since January, Lipper said on Thursday.

High-yield funds also posted their biggest outflows since January, data released by the company showed.

“Look at the bad earnings that came out on Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL), Intel (NASDAQ:INTC),” said Tom Roseen, head of research services for Lipper, a unit of Thomson Reuters Corp.

“People are freaking out a bit and pulling money out. The earnings reports have not been all that strong,” he said.

Apple’s stock has fallen nearly 5 percent since the iPhone maker reported last week its first revenue decline in over a decade.

Technology funds posted $722 million in outflows during the latest week, the largest since U.S. stock market hit a 2016 low in February. Precious metals funds, largely invested in gold and silver, took in $1.3 billion.

“It makes sense,” Roseen said. “The dollar is weakening and there’s this risk-off trade.”

Exchange-traded fund investors were responsible for 91 percent of the latest stock fund outflows, according to the data, which includes mutual funds.

The last time U.S. stock funds posted more withdrawals was in the week ended Jan. 6, when investors pulled $12 billion.

Bond fund investors looked for sure bets, withdrawing $1.8 billion from lower credit, high-yield bond funds, the largest outflows since January. Such funds have not posted more withdrawals since the week ended Jan. 20, when investors pulled $2 billion.

But investment-grade bond funds recorded $2.1 billion in inflows, their ninth week netting new cash, the data showed. Safe-haven Treasury funds attracted their first inflows since late February.

Overall, taxable bond funds drew in $1.1 billion during the week and recorded their fifth straight week of inflows. Relatively low-risk money market funds took in $6.5 billion during the week, the data showed.

Investors preferred international stocks to U.S. shares. U.S.-focused funds posted $11.8 billion in outflows, while non-domestic funds took in $613 million during the week.

But the investors pulled back from both European and Japan stocks for the 14th straight week, paring back exposure further after the Bank of Japan held off on expanding monetary stimulus.

The $7.8 billion of outflows in April from exchange-traded products that hold Japanese stocks was the largest withdrawal for those funds ever, said Paul Young, a spokesman for fund management company BlackRock Inc (NYSE:BLK).

Source: Reuters