(Reuters) – U.S.-based equity funds posted greater than $eight.four billion of money withdrawals within the week ended Wednesday, following two weeks of inflows, in accordance with Refinitiv’s Lipper.
The withdrawals got here ahead of subsequent week’s Federal Reserve meeting. In the identical week, U.S.-based money-market funds attracted $26 billion, their fifth consecutive week of inflows, Lipper stated.
The Federal Reserve is extensively anticipated to chop rates of interest subsequent week to bolster the U.S. financial system, even because the U.S. unemployment fee sits at its lowest in 50 years. Broad expectations that the Fed would reduce charges to counter the influence of a protracted commerce warfare have helped Wall Street’s essential indexes scale report ranges this month.
“Despite plus-side equity returns, both fund investors and ETF investors were net redeemers of equity assets, redeeming a net $8.4 billion for the week,” stated Tom Roseen, head of analysis providers at Lipper.
“Shrugging off progress in the U.S.-China trade talks, a nice start to the Q2 earnings season, and general agreement on the U.S. budget and ceiling, investors showed constraint after learning that Iran had seized a British oil tanker in the Strait of Hormuz, increasing geopolitical concerns.”
Roseen stated buyers moved cash from equities to bonds. “Both fund and ETF investors padded the coffers of taxable and tax-exempt bond funds, investing net new money in longer-dated issues,” he stated.
U.S.-based municipal bond funds attracted $1.96 billion of internet new money, the group’s largest weekly internet inflows on document going again to 1992, Lipper stated. U.S.-based investment-grade company bond funds attracted about $2.5 billion within the week ended Wednesday, their eighth consecutive week of inflows, in line with Lipper knowledge. At the lower-end of the credit-quality spectrum, U.S.-based high-yield junk bond funds attracted greater than $1.three billion within the week ended Wednesday, their seventh straight week of inflows, Lipper stated.
For the fifth week operating, buyers have been internet purchasers of cash market funds, injecting $26 billion into this safe-haven asset class, Roseen added.
Reporting by Jennifer Ablan; modifying by Susan Thomas and Lisa Shumaker