AP News

Cash pulled from stock funds 15th straight week


WASHINGTON (AP) — Investors withdrew money from stock mutual funds for the 15th consecutive week during the period ended Oct. 31. Bond funds continued to attract new money, as they have all but one week this year.

The movement of cash was in line with the conservative approach that many investors have taken since the financial crisis of 2008. Money has consistently been withdrawn from stock mutual funds and added to lower-risk bond funds.

Stocks:

Investors withdrew a net $1.89 billion from U.S. stock funds, the Investment Company Institute said in a preliminary report Wednesday. Withdrawals have exceeded deposits for 15 weeks in a row, dating to July 18.

Cash was pulled out during the latest week as the Standard & Poor's 500 stock index rose 0.2 percent in a shortened trading week. Financial markets were closed on Oct. 29 and 30 due to the effects of Superstorm Sandy.

The ICI said a net $548 million was withdrawn during the latest week from funds investing primarily in foreign stocks. Those funds attracted cash through most of the first half of this year. But withdrawals have exceeded deposits for 15 consecutive weeks dating to mid-July.

Bonds:

Investors deposited a net $2.62 billion into bond funds, which have attracted new cash in all but one week so far this year. The latest week's total is down from the $6.61 billion in net deposits during the previous week.

Most of last week's bond fund total was from cash flowing into taxable bond funds, which primarily invest in corporate bonds. Those funds attracted $2.23 billion in new cash. Municipal bond funds took in a net $385 million. Those funds invest in bonds issued by state and local governments.

A net $672 million was withdrawn from hybrid funds, which invest in both stocks and bonds.

Overall, investors withdrew a net $488 million into long-term mutual funds of all types during the weeklong period, compared with net deposits of $5.46 billion in the previous week.


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