U.S. stock funds set for record monthly withdrawals: Lipper

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., December 20, 2018. REUTERS/Brendan McDermid

NEW YORK (Reuters) – Investors fled U.S.-based stock funds in the latest week, setting those investments up for their biggest month of withdrawals on record, Lipper data showed on Thursday.

More than $80.7 billion poured out of U.S.-based stock funds during the 14 days through Dec. 19, representing about 1 percent of the total assets in such funds, according to the research service.

The selling continued during a week in which the U.S. Federal Reserve raised rates for the ninth time in about three years and reaffirmed its commitment to tightening monetary policy even as markets prepare for a slowdown in economic growth. U.S. stocks slid again on Thursday, with the Nasdaq Composite on the cusp of confirming it is in bear market territory. [.N]

If the withdrawals continue for the eight final trading days of the year, December will mark the biggest cash-out from U.S. equity funds on records that date to 1992, when the fund industry was far smaller.

“The central bankers are taking the punchbowl away and it’s not being well received,” said Stephen Blumenthal, executive chairman of CMG Capital Management Group Inc, an investment manager. “If we were having all these troubles and the market was ridiculously cheap it wouldn’t be as big of a problem.”

With the recent market declines, the S&P 500’s forward price-to-earnings ratio is now at 15.3, its lowest level since early 2016 but above its 15 longer-term average, according to data

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