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ICI
said investors added $2 billion to U.S.-based funds invested in
developed-market stocks outside the country during the week
ended July 6, after pulling $2.7 billion from the funds the week
before in the funds' worst rout since 2011. The funds, invested
in the United Kingdom, Germany and other advanced economies,
have not pulled in that much money since the week that ended
Feb. 24.
U.S.-based junk-bond funds stanched withdrawals, taking in $82
million one week after investors wiped $3.4 billion from the
funds' ledgers in their biggest weekly outflows this year,
according to ICI.
The week before, investors took the most money overall out of
U.S.-based stock and bond mutual funds this year following the
British vote to leave the European Union, launching a process
called "Brexit."
"Equity investors are facing tough tradeoffs and decided to buy
where there were temporary discounts caused by Brexit," said
Matt Cody, co-chair of the investment committee at Wetherby
Asset Management in New York.
He said investors have the choice of investing in stocks after
the S&P 500 hit a record high for the third consecutive day on
Wednesday or buying bonds when the 10-year Treasury's yield is
near record lows.
Overall, U.S.-based equity funds recorded withdrawals of $3.1
billion during the week, while bond funds attracted $1.3
billion, according to ICI, a fund trade group. Domestic stock
funds more than doubled their outflows from the week prior, to
$4.5 billion, adding to a brutal year for mutual-fund managers
who specialize in picking U.S. stocks.
Even as investors from BlackRock Inc to DoubleLine Capital's
Jeffrey Gundlach said they favored some buying in emerging
markets, funds specializing in those stocks posted $610 million
in outflows during the week. Global-bond funds posted $142
million in outflows, ICI data showed.
"We are completely out of global debt; we don't believe paying
governments to lend them money is a good investment plan for our
clients," said Cody. "You can still get positive yield in
emerging debt, but energy-price weakness and increasing
sovereign-debt loads lead to risks outweighing the benefits."
(Reporting by Trevor Hunnicutt; Editing by David Gregorio)
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