'Nervous Investors' Redeem $42 Billion From Funds in June

For the first month in five, investors were net redeemers of fund assets, withdrawing a close to $42 billion from the conventional funds business, according to a Lipper report released early Wednesday.

Flows from stock and mixed-equity funds dropped by nearly $20 billion, while some $43 billion moved out of money-market funds. Bond funds, on the other hand, gathered more than $21 billion in assets last month.

“For the second consecutive month, investors were net redeemers of [U.S. diversified equity, or USDE] funds in June, pulling out $21.9 billion,” said Tom Roseen, head of research services for Lipper, in the recent report, entitled “Nervous Investors Redeem $41.8 Billion from the Conventional Funds Business in June.” 

Large-cap funds lost about $11 billion, experiencing their 25^th consecutive month of outflows. Multi-cap core funds, though, had inflows of nearly $1 billion, attracting the largest inflows of the macro-group.

World-equity funds grew by $4 billion with institutional investors injecting net new money into this category. World-equity funds added $200 million.

Bond funds drew more than $21 billion in net purchases, but investors unloaded about $3 billion of loaded funds.

The Dow Jones Industrial Average lost 1.24% in June, notes Roseen, losing ground for the second month in a row, and the NASDAQ dropped by 1.24%.

In fixed income, Treasury bonds with maturities of less than one year saw the yield curve shift down, while for the longer-dated maturities, yields rose between 0 and 18 basis points. The benchmark ten-year Treasury yield finished the month 13 basis points higher at 3.18% The yield on the two-year bond remained the same for the month at 0.45%.

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