Investors again retreat from stock mutual funds

AP News
Posted: Sep 19, 2012 4:38 PM
Investors again retreat from stock mutual funds

WASHINGTON (AP) — Investors withdrew money from stock mutual funds for the eighth consecutive week during the period ended Sept. 12, despite further gains in the stock market. Bond funds attracted the largest amount of new cash for a weeklong period since early April.

It's more evidence of conservative investing trends dating to 2008, suggesting investors remain anxious about stock volatility and the economy four years after the financial crisis began.


Investors withdrew a net $2.8 billion from U.S. stock funds, the Investment Company Institute said on Wednesday. Cash was pulled out in the latest period as the Standard & Poor's 500 stock index rose 2.3 percent.

Withdrawals from U.S. stock funds have exceeded deposits each week since the period ended July 18, and for all but two weeks dating to mid-February. Withdrawals have continued even as stocks have gained more than 16 percent year-to-date.

The ICI said a net $548 million was withdrawn during the latest week from funds investing primarily in foreign stocks. Those funds have attracted cash most of this year, but withdrawals have exceeded deposits for eight consecutive weeks.


Investors deposited a net $8.1 billion into bond funds, which have attracted new cash all but one week so far this year. The latest week's intake was the largest since investors added a net $9.7 billion to bond funds during the week ended April 4.

Last week's total includes $6.8 billion of net deposits into taxable bond funds, which primarily invest in corporate bonds, and $1.3 billion into municipal bond funds, which invest in bonds issued by state and local governments.

Hybrid funds, which invest in both stocks and bonds, attracted $1.3 billion in net deposits during the weeklong period.

Overall, investors deposited a net $6.1 billion into long-term mutual funds of all types, compared with net deposits of $3.1 billion in the previous week.