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US-based stock funds post biggest outflows in six weeks: ICI
[NEW YORK] Investors in US-based mutual funds pulled US$1.5 billion out of stock funds in the week ended June 24 on volatility stemming from worries that Greece could exit the euro zone, data from the Investment Company Institute showed on Wednesday.
The outflows were the biggest in six weeks and the first in three weeks, according to the data from ICI, a US mutual fund trade organization. Funds that specialise in US shares posted US$3.5 billion in outflows to mark their biggest withdrawals in three weeks and their 17th straight week of outflows.
Funds that specialise in international shares attracted US$2 billion, marking their 25th straight week of inflows, but their smallest in 12 weeks.
While the data showed huge inflows into taxable bond funds led to US$17 billion in overall inflows to bond funds, the biggest on ICI's records going back to 2007, ICI spokeswoman Rachel McTague said the inflows into taxable bond funds did not reflect shareholder activity but were primarily the result of fund companies converting non-1940 Act products into mutual funds.
The total outflows from stock funds came as worries that Greece was edging toward a potential exit from the euro zone injected volatility into stock markets worldwide over the period.
"It's reflective of more pessimism, and I think it is tied to volatility and a backdrop of not really going anywhere generally," said Willie Delwiche, investment strategist at wealth management firm Robert W Baird & Co. in Milwaukee, on the outflows from stock funds.
He said investors were wearying of stocks worldwide given a pause in upward momentum. While MSCI's all-country world equity index rose over 6 per cent from the start of the year through May 21, it has fallen about 1.6 per cent from that date through June 24.
Hybrid funds, which can invest in stocks and fixed income securities, attracted US$394 million to mark their biggest inflows in five weeks.