Investors return cautiously to some stock funds

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The late summer exodus from stock funds slowed dramatically last week as investors pulled much less money out of U.S. funds and sank some into foreign and hybrid funds, the latest data from the Investment Company Institute shows.

Investors took out a net $131 million from stock funds and $76 million from bond funds in the week ended Aug. 31, the institute said. They added $1.1 billion to hybrid funds, which invest in both stocks and bonds.

The data released Wednesday reflected the first weekly total net increase in stock and bond mutual funds after six consecutive weeks of withdrawals.

The small withdrawal from stock funds was mainly due to the shifting of funds between domestic and foreign stock funds. Domestic stock funds were reduced by $748 million while foreign stock funds were increased by $617 million.

The four-week moving average for stock funds, a less volatile measure of fund flows, still showed an average weekly outflow of $7.9 billion, a sharp decrease from the previous week’s $11.1 billion.

Investors took out a net $76 million from bond mutual funds, compared to the previous week’s outflow of $20 million. Taxable bond funds were reduced by $303 million while municipal bond funds were increased by $227 million. The four-week moving average for bond funds decreased to an average weekly outflow of $1.9 billion.

Estimated mutual fund flows in millions of dollars:

Hybrid funds are able to invest in stocks and fixed-income investments.

Source: Investment Company Institute