Investors again retreat from stock mutual funds

AP News
Posted: Aug 01, 2012 4:24 PM
Investors again retreat from stock mutual funds

WASHINGTON (AP) — Investors became more cautious, withdrawing money from stock mutual funds during the week ended July 25 while continuing to deposit cash into bond funds at a rapid clip.


Investors withdrew a net $2.1 billion from U.S. stock funds for the weeklong period, while pulling a net $568 million from funds investing primarily in foreign stocks, the Investment Company Institute said on Wednesday. This marked a change of sentiment. Investors added money to both categories in the previous week, which was the first time in seven weeks that deposits into U.S. stock funds exceeded withdrawals.

In contrast, foreign stock funds had been attracting cash. The week ended July 25 was the first since mid-May in which investors pulled money out of foreign stock funds. The Standard & Poor's 500 stock index fell nearly 2.6 percent during the week.


Investors deposited a net $5.8 billion into bond funds, down slightly from and intake of nearly $6.5 billion during the preceding week. The latest week's total includes $4.3 billion of net deposits into taxable bond funds, which primarily invest in corporate bonds, and nearly $1.5 billion into municipal bond funds, which invest in bonds issued by state and local governments. Investors have added cash to bond funds in all but one week so far this year.

Hybrid funds, which invest in both stocks and bonds, attracted $737 million in net deposits last week.

Overall, investors deposited a net $3.8 billion into funds of all types, down from a net $8 billion in the previous week.