Fund investors continue largest pullback from U.S. stocks since '13

By David Randall

NEW YORK (Reuters) - Investors continued the largest retreat from the U.S. stock market since at least 2013 by pulling nearly $10.9 billion from mutual funds and exchange-traded funds that hold domestic equities last week, according to data released Wednesday by the Investment Company Institute.

The withdrawals pushed the total losses from stock funds to $36.6 billion over the last 3 weeks, the first time in ICI records going back to 2013 that investors had pulled $10 billion or more from U.S. stock funds over three consecutive weeks.

Weak manufacturing data and concerns that the trade war between the U.S. and China could lead to a global economic recession have weighed heavily on investor sentiment, leaving the benchmark S&P 500 trading in a relatively narrow range. The index is up slightly more than 19% for the year to date, largely due to expectations that the Federal Reserve will continue its series of equity-friendly interest rate cuts.

Investors continued to seek the perceived safety of bonds, sending slightly more than $5.8 billion into taxable and municipal debt funds. For the year to date, the category has brought in nearly $333.2 billion in new assets, compared with a nearly $114 billion in withdrawals from U.S. stock funds.

World stock funds, meanwhile, notched a five-week losing streak by dropping another $660 million in outflows. Investors have pulled slightly more than $40.5 billion from the category since the beginning of the year.

(Reporting by David Randall; Editing by Nick Zieminski)

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