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Investors Pull More Money Out of Stock Funds

Investors redeemed $14.21 billion during the week ended Wednesday, net of new sales, according to TrimTabs.
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Investors continued to pull their money out of stocks funds over the last week as the bears refused to relinquish their hold on Wall Street.

Investors redeemed $14.21 billion during the week ended Wednesday, net of new sales., according to TrimTabs Investment Research of Santa Rosa, Calif. That was up from $12.25 billion the previous week.


Dow Jones Industrial Average

closed at 12,466.16 Wednesday, down 2.1% from 12,735.31 on Jan. 9.

"What a week," said Vincent Deluard, global equities strategist at TrimTabs. "There were big outflows -- no surprises here."

Funds investing primarily in U.S. stocks saw a net $8.25 billion walk out the door, down slightly from $8.90 billion during the previous week.

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Deluard said that from May to January, investors have pulled a net $102 billion from U.S. equity mutual funds.

Funds investing primarily in non-U.S. stocks had net outflows about $6 billion, nearly twice as much as $3.35 billion the previous week.

Stock market losses wre good for bond funds, which took in a net $2.12 billion, up from $1.6 billion the previous week. Hybrid funds, which invest in both stocks and bonds, took in $908 million, up from $680 million the previous week.

Investors added $8.53 billion to exchange-traded funds during the past week, reversing the $7.79 billion they pulled out the previous week.

ETFs that invest in non-U.S. stocks took in $1.14 billion, after seeing $1.09 billion walk out the door the previous week.

Deluard notes that that ETFs attract more institutional investors, who tend to have a longer-term investment horizon, while mutual funds attract retail investors, who can be more skittish.

"From a logical standpoint," he said, "if you see equities going down, you may want to stick it out and buy, not sell, which is something people are doing right now."