U.S. Bond Mutual Funds See $3.1 Billion in Weekly Withdrawals, ICI Says

U.S. investors put $1.48 billion into stock mutual funds in the week ended Aug. 17, the first deposits in four months, according to the Investment Company Institute.

Customers pulled $3.1 billion from U.S. mutual funds that buy bonds, the fourth straight week of withdrawals from fixed income, the Washington-based trade group said today in an e- mailed statement. U.S. stock funds collected $1.13 billion during the week ended Aug. 17.

The equity-fund deposits reversed a streak of withdrawals that accelerated to $30 billion during the previous week, the most since October 2008, ICI data show. Stocks fell in late July and the first three weeks of August amid concerns that the economic recovery is faltering and an unprecedented downgrade of U.S. credit by Standard & Poor’s.

The last previous equity deposits came in the week ended April 20, when $3.05 billion was invested, including $1.92 billion in domestic funds.

The S&P 500 Index, a benchmark for large-company stocks, has lost 14 percent since reaching this year’s high on April 29. The index has advanced 4.8 percent this week, trimming this year’s decline, as traders speculate that policy makers will take further steps to stimulate the economy.

Domestic equity funds experienced $9 billion in redemptions in the first six months of 2011 and may be headed for a record fifth straight year of withdrawals, ICI data show. All stock funds, including those that invest outside the U.S., gathered a net $13.7 billion in deposits in the first half.

To contact the reporter on this story: Sree Vidya Bhaktavatsalam in Boston at sbhaktavatsa@bloomberg.net

To contact the editor responsible for this story: Larry Edelman at ledelman3@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.