Fund investors continue retreat from U.S. stock market

FILE PHOTO: A trader works on the trading floor at the New York Stock Exchange (NYSE) at the opening of the market in New York City, U.S., August 26, 2019. REUTERS/Andrew Kelly

NEW YORK (Reuters) – Investors last week pulled nearly $4.4 billion from mutual funds and exchange-traded funds that hold U.S. stocks, continuing a retreat from the domestic equity market that has extended over four of the last five weeks, according to data released Wednesday by the Investment Company Institute.

The pullback from the U.S. stock market came as concerns about the trade war between the United States and China have weighed on investor sentiment, while signs of slowing economic growth across the globe have pushed companies such as Goldman Sachs to increase the probability that the United States falls into recession within the next 12 months.

Overall, investors have pulled a net of nearly $98 billion out of U.S. stock funds since the beginning of the year, with about $35.5 billion – or 36% of the total outflows – coming since the start of August.

The broad retreat from the U.S. market comes despite a rally that has pushed the benchmark S&P 500 up 19.4% for the year to date. The index is up 2.2% since the beginning of September.

Investors continued to send money to bond funds, which took in slightly more than $6.9 billion last week. Those inflows pushed the year to date gain for the category up to $289.7 billion.

World stock funds, meanwhile, were little changed, with a net inflow of $283 million. Investors have pulled $33.2 billion from the category since the start of the year.

Reporting by David Randall; Editing by Steve Orlofsky