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US investors yank record levels of money from stock funds

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Investors pulled nearly US$79 billion from US stock funds during the first seven month of this year, more than in any previous year including during the height of the financial crisis, Morningstar Inc said on Friday.

[BOSTON] Investors pulled nearly US$79 billion from US stock funds during the first seven month of this year, more than in any previous year including during the height of the financial crisis, Morningstar Inc said on Friday.

Net investor withdrawals from US stock funds surged to US$78.7 billion through the end of July, Morningstar said. "Looking back at annual flows reveals that investors'confidence in the United States may be even shakier than recent data indicates, Morningstar said in its latest monthly report on mutual fund flows.

In July alone, estimated net withdrawals from US stock funds increased to US$14.3 billion, up from US$8 billion in June, Morningstar said.

Some of the withdrawals, particularly in the case of Fidelity Investments, are related to a shift in assets to collective investment trusts, Morningstar said. Proponents of CITs say these investment vehicles can offer lower expenses to investors because they have less regulation than a mutual fund.

REUTERS