U.S. mutual fund investors ditch equities despite S&P 500 gains: ICI

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NEW YORK (Reuters) – U.S. mutual fund investors fled from stocks for the 14th straight week as ongoing trade war fears divided markets, Investment Company Institute data showed on Wednesday.

Withdrawals from equity-focused long-term mutual funds totaled $4.2 billion for the week ended July 11, ICI said.

The bearish sentiment among mutual fund investors ran counter to that of exchange-traded fund investors and the broader market. Equity ETFs saw net inflows of $1 billion during a seven-day period in which the S&P 500 added 2.24 percent.

Markets rose for four days on strong economic news before retracing some of the gains after Washington threatened to impose tariffs on an additional $200 billion worth of Chinese goods and Beijing warned that it would hit back.

Combined equity mutual fund and ETF withdrawals rose to a total of$36.9 billion since mid-June.

Ongoing investor demand for safety led to $7.4 billion in deposits to bond funds, the 21st straight week of inflows for the category.

Tax-free municipal bond funds saw the strongest demand since January, attracting $1 billion of investor cash, ICI data showed. Taxable bonds added $6.4 billion, the largest net deposit since April.

Commodity funds broke a five-week trend of outflows with $101 million in cash deposits.

Reporting by James Thorne; editing by Jonathan Oatis

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