US fund investors move into overseas equity

Wall_streetUS investors have increased their investment in non-domestic equity funds in the past week as US stocks were rattled by “Trump fears”.

Non-domestic equity mutual funds saw new money of $1.3 billion, accounting for all of the net inflows for the equity group, while domestic equity funds shed $436 million of assets, Thomson Reuters Lipper data shows.

“It was a rough week for the equity markets as investors grew impatient for the Donald Trump campaign-promised tax cuts and became fearful that the administration was about to get bogged down in the quagmire of healthcare legislation,” said Patrick Keon of Thomson Reuters Lipper.

The figures are for the week ended Wednesday (March 22), during which time the S&P 500 Index and the Dow Jones Industrial Average lost 1.54% and 1.38%, respectively.

“The Trump fears hit home” on Tuesday this week when the Dow fell 237.85 points and the S&P 500 fell 29.45 points, their worst one-day losses since prior to the election, said Keon – though both indices were still up 5% for the year to date.

At the top level, both mutual funds and ETFs suffered their second straight week of net outflows across asset classes, with $9.8 billion leaving funds.

Taxable bond funds took in over $8.3 billion and municipal bond funds saw inflows of $173 million.

Overall, equity mutual funds saw a “trend reversal” by raising $843 million of net new money, while equity ETFs had net outflows of $1.9 billion.

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