Massive Withdrawals from U.S. Stock Funds Spark Market Concerns

Funds that primarily invest in U.S. stocks reported withdrawals of $21.1 billion over two weeks, the largest withdrawals since December 2022, Bank of America strategists said Friday.

Information from EPFR Global shows that investors withdrew $4.1 billion from US equity funds in the week ending April 17.

Analysts have noted that, in the first three months of the year, the positive sentiment in the market in the first three months equates to good news with beneficial effects on the market. However, as the season progressed, this view changed as positive news was now interpreted as negative for the market.

Referring to the April issue of Bank of America’s Global Fund Manager Survey (FMS), strategists noted that investor optimism has reached its highest level since January 2022. Further expectations To to be a major market engine.

Meanwhile, equity funds worldwide saw withdrawals of $9.1 billion, while cash flows saw massive outflows of $159.8 billion.

In contrast, the bond market saw an increase in investments, with a total of $5.7 billion added. Investment grade bonds in particular continued to attract funds, entering $3.8 billion for the 25th straight week.

However, high-yield bonds saw a sharp decline by $2.3 billion, representing the biggest weekly retreat since October. Emerging market debt securities recorded inflows for the third week in a row.

Funds focused on European stocks continued to record withdrawals for the sixteenth week in a row, with $1.8 billion withdrawn. Funds investing in Japanese stocks also faced a pullback, with $600 million marking the second straight week of net outflows.

Looking at different investment strategies, funds devoted to large-cap US stocks saw a $1.2 billion retreat, small-cap funds lost $1.7 billion, and funds focused on both value and growth stock withdrawal of $2.2 billion To each their own.

On the industry side, technology-focused funds led the way with net inflows of $500 million, while sectors focused on consumer goods and healthcare saw the biggest draws, with each sector losing $700 million .

Performance and digital currencies

Cryptocurrency saw inflows of $26 million, while $0.9 billion withdrew from the gold market.

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