By Trevor Hunnicutt
NEW YORK (Reuters) - Investors yanked the most money from U.S.-based equity funds since December during the latest week, Lipper data showed on Thursday, as they feared stocks may be overpriced given the many roadblocks in implementing U.S. President Donald Trump's economic policies.
Nearly $12 billion drained from the stock funds in the seven days through April 5, including $7 billion SPDR S&P 500 ETF (NYSE:SPY), a fund actively traded by investors ranging from institutional investors making speculative bets to retail buyers.
Trump's plans to cut taxes and regulations while boosting infrastructure spending lifted the shares of industrial companies, banks and the smallest publicly traded firms for weeks after his Nov. 8 election. But all three categories lagged the S&P 500 in the first quarter as investors lost confidence that Trump could fulfill his agenda.
Stock mutual funds, used extensively by retail investors, also continued a streak of net outflows that has lasted the better part of the last two years. The outflow totaled $7.4 billion during the week.
By contrast, U.S.-based funds invested in stocks abroad took in $1.1 billion during the week, the data showed.
"There's a whole lot of uncertainty right now, which is never good for the equity markets," said Pat Keon, senior research analyst for Thomson Reuters Lipper.
Keon said the United States' response to conflict in Syria and North Korea has intensified jitters over policy even though market returns have been strong.
Matthew Bartolini, head of SPDR Americas Research at State Street Global Advisors, said outflows likely include both long-term investors who are trimming their winning bets and shorter-term investors shifting to other markets.
Investors' worries also included March U.S. auto sales data, which this week came in below expectations.
And U.S. House of Representatives Speaker Paul Ryan said President Donald Trump's promised tax reform, which has boosted equities markets, would take longer to accomplish than a failed attempt this year to reform healthcare.
Moreover, minutes of the U.S. Federal Reserve's March meeting, released on Wednesday, showed policymakers weighing plans to reduce the central bank's massive holdings totaling $4.5 trillion.
During the latest week, financial sector funds posted $387 million in withdrawals. Technology, which lagged financials considerably after the election, attracted $409 million in their largest week of inflows since February, according to Lipper.
U.S-based taxable-bond funds pulled in $4.3 billion in their third straight week of inflows, the research service said. High-yield funds gathered $2.4 billion after facing withdrawals last month.