Many are cashing out of stock mutual funds

As stocks continue to hover around all-time highs, investors in U.S. stock mutual funds continue to cash in their chips.

The latest data from fund-industry group ICI shows domestic stock funds suffered a net outflow of $7.4 billion in the week ended Aug. 3. Since the week ended July 6 — which was the week before the Standard & Poor’s 500 stock index hit its first of eight record highs — fund investors have yanked a net $37.4 billion out of long-term mutual funds that invest in American companies.

The most recent data is the latest proof that investors remain jittery about the stock market, despite the fact it has been a summer of new highs for major U.S. stock indexes, including the S&P 500, the Dow Jones industrial average and the technology-dominated Nasdaq composite.

As has been the case in recent years, money flowed into bond funds, despite the fact that yields on most fixed-income assets, such as U.S. government bonds, high-yield corporate bonds and other income-producing investments, are at or near record lows.

In the most recent week of data, a net $8 billion flowed into bond funds, according to the ICI. That pushes the five-week total net inflows to bond funds up to an estimated $27.8 billion.

The unwillingness of Main Street investors to embrace domestic mutual funds suggests talk of the so-called “Great Rotation” to stocks is still more theory than reality. It’s no secret that the stock market will need fresh buyers to keep climbing higher.