By Trevor Hunnicutt
NEW YORK (Reuters) - Investors pulled another $3.9 billion from U.S.-based stock funds during the week that ended May 18, Lipper data showed on Thursday, bolstering a trend of outflows that has persisted most of this year.
The funds' lackluster sales came during a period of volatile trading and as the Federal Reserve signaled it could raise interest rates as soon as June.
U.S. fund investors have been in a negative mood - on stocks, at least - for many weeks. Despite a rally in riskier assets that started in February, there have not been two weeks in a row of inflows for U.S.-based stock funds since November 2015.
Year-to-date outflows from U.S.-based stock funds now total $45 billion, rivaling the $50 billion in outflows for all of 2011, the last year of major cash withdrawals. The funds bled more than $72 billion in 2008, at the peak of the financial crisis, Lipper data show.
"This is substantially due to mutual fund investors bailing on domestic equity," said Jeff Tjornehoj, head of Americas research at Lipper. "If domestic equity is the bulk of your portfolio, the only way to get into a new product is to sell from your core, and that's what they seem to be doing."
During the latest week, U.S.-based funds focused on domestic shares accounted for 62 percent of the stock outflows. European and Japanese stock funds posted their 16th straight week of outflows, according to the data.
Healthcare funds posted their largest outflows in more than a month, at $662 million, while real-estate sector funds took in $750 million, their best result since November. Technology-sector funds posted a fourth straight week of outflows, Lipper said.
Taxable bond funds in the United States attracted $4.9 billion in the same week, data from the Thomson Reuters fund research service showed.
The strong result for bond funds was supported by strong interest across the market - from high-yield bonds to emerging-market debt, Treasury, municipal and investment-grade bond funds.
The investment-grade funds, tracking the highest-credit companies, pulled in $1.1 billion during the week, their 11th consecutive week of inflows, according to Lipper.
Relatively low-risk money market funds took in $10.7 billion, for a fourth straight week of netting new cash.
The weekly Lipper fund flow data is compiled from reports issued by U.S.-domiciled mutual funds and exchange-traded funds.
The following is a broad breakdown of the flows for the week, including ETFs (in $ billions):
Sector Flow Chg % Assets Assets Count
All Equity Funds -3.904 -0.08 5,053.883 11,993
Domestic Equities -2.435 -0.07 3,576.153 8,514
Non-Domestic Equities -1.469 -0.10 1,477.730 3,479
All Taxable Bond Funds 4.942 0.22 2,228.639 6,094
All Money Market Funds 10.672 0.43 2,480.657 1,139
All Municipal Bond Funds 1.245 0.33 373.088 1,418
(Reporting by Trevor Hunnicutt; Editing by Jennifer Ablan and Leslie Adler)