Fund investors flee U.S. stock funds

June 25 01:27 2015

In a sign of stock market nervousness on Main Street, mutual fund investors have yanked more money out of U.S. stock funds than they put in for 16 straight weeks. The last time domestic stock funds had positive net cash inflows was in the week ending Feb. 25, according to data from the Investment Company Institute, a mutual fund trade group.2013-11-04T131020Z_8_CBRE99U0VX000_RTROPTP_3_MARKETS-STOCKS_original

In the week ended June 17, the most recent data available, mutual funds that invest in U.S. stocks suffered net outflows of $3.45 billion, according to the ICI. Since late February, U.S. stock funds have suffered estimated outflows of $54.63 billion. Those net withdrawals come despite the fact the benchmark Standard & Poor’s 500 hit a fresh record high of 2130.82 on May 21 and the Dow Jones industrial average notched a fresh record on May 19. Yesterday, both the tech-packed Nasdaq composite and small-company Russell 2000 stock index both posted record closes.

Still, the fact the S&P 500 and Dow have yet to breakout to higher highs could be due Main Street investors selling of U.S. stock funds. Driving the selling are headwinds such as coming interest rate hikes from the Federal Reserve, angst due to the Greek debt crisis and the fact that U.S. stocks are now trading above their longer-term price-to-earnings ratio, which suggests stocks are a tad pricey.