Money was withdrawn from stock mutual funds for the 24th consecutive week during the period ended Jan. 2 as investors remained cautious while Congress negotiated a last-minute deal to avoid the "fiscal cliff." Bond funds continued to attract new money.
The movement of cash was in line with the conservative approach that many investors have taken since the financial crisis of 2008. Money has consistently been withdrawn from stock mutual funds and added to lower-risk bond funds.
Investors withdrew a net $8.29 billion from U.S. stock funds, the Investment Company Institute said in a preliminary report Wednesday. That compared with withdrawals of $3.87 billion for the week ended Dec. 26. Withdrawals have exceeded deposits each week since mid-July.
Cash was pulled out as the Standard & Poor's 500 index rose 3 percent during the weeklong period. Stocks declined early in the week, then rallied on Jan. 2 following the long-delayed, fiscal cliff agreement that Congress reached to limit tax increases and delay automatic spending cuts.
The ICI said a net $1.21 billion was withdrawn during the week from funds investing primarily in foreign stocks. A net $81 million was deposited into those funds in the previous week.
Investors deposited a net $3.21 billion into bond funds during the period ended Jan. 2. That's up from net deposits of $2.56 billion during the previous week.
A net $2.92 billion was deposited into taxable bond funds, which primarily invest in corporate bonds. Investors added $291 million to municipal bond funds, which invest in bonds issued by state and local governments.
During the latest week, a net $152 million was withdrawn from hybrid funds, which invest in both stocks and bonds.
Overall investors withdrew a net $6.44 billion from long-term mutual funds of all types during the week, compared with net withdrawals of $455 million in the previous week.