Investors in the United States appear to be frightened of accessing international markets as of late. With global economic growth slowing down and a lot of financial instability occurring in several important markets, domestic investors just want to stay home.
A new report from the Investment Company Institute (via Reuters) suggests that investors withdrew the most money since May from U.S.-based mutual funds that purchase international stocks. The data showed that global stock funds experienced $2.2 billion in withdrawals during the week. This is a five-month high.
The two markets that were affected the most were Japan and Europe. Although they have been popular markets for investors to access, they have been unable to avoid significant economic weakness. When you add in a climbing greenback and weakness in different currencies into the mix then international stocks seem less attractive.
Overall, stock mutual funds and exchange-traded funds (ETFs) have posted about $6.6 billion in outflows for the week. The trend for most of 2016 is transitioning out of stocks into the bond market. Over the last week, bonds funds received more than $6.4 billion, with municipal and corporate bonds leading the way.
This is an interesting investment move considering that hundreds of billions of dollars worth of bonds are in negative territory and that the entire bond market is in a bubble (SEE: Wow! Global negative-yielding debt stands at $11.4 trillion: Fitch and Central banks causing investors to lose $24 billion a year amid negative interest rates: report)
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