U.S. domestic stock funds report more demand than peers abroad: Lipper

By James Thorne

NEW YORK (Reuters) – Investors in U.S. funds traded international equities for domestic stocks during the latest week as earnings beat expectations while trade tensions simmered, Lipper data showed on Thursday.

U.S.-based equity funds posted $620 million in withdrawals for the week ended Wednesday, after attracting $1 billion the week prior, Lipper said.

The withdrawals were driven in large part by investors leaving non-domestic equity funds, which saw $1.1 billion in withdrawals.

U.S.-based domestic equity funds, by contrast, attracted $474 million and a second straight week of inflows, Lipper said.

The strong performance by domestic equity funds came as 83.9 percent of companies have reported second-quarter profits that beat analyst expectations so far, according to Thomson Reuters I/B/E/S.

“When we get back to the brass tacks, we really had a good beginning to the earnings season,” said Tom Roseen, head of research services at Thomson Reuters Lipper.

Investors freed up more cash by withdrawing $1.3 billion from U.S.-based money market funds.

Yet trade tensions kept investors on edge, with U.S. President Donald Trump saying during the week that he is ready to impose tariffs on all $500 billion of imported goods from China.

Fund investors deposited $1.4 billion into U.S.-based taxable-bond funds, a third straight week netting cash. Their municipal bond counterparts took in $550 million, according to Lipper.

U.S.-based precious metals commodities funds ended a streak of outflows that began in early May, attracting $211 million for the period.

Dollar-denominated metals, such as gold, became more affordable for investors abroad after Trump criticized the greenback’s strength in an interview aired on Friday and sent the currency lower.

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