New York

Even as the S&P 500 Index clawed its way to a fresh record and squeezed out a third consecutive weekly gain, signs of fading enthusiasm in US stocks have become increasingly difficult to ignore.

The latest can be seen in the SPDR S&P 500 Trust, the biggest exchange-traded fund tracking the US equity benchmark. As of Thursday, investors had pulled $3.8 billion out of it in July. That puts the fund on pace for a fourth consecutive monthly outflow, which would be the longest streak since the start of the bull rally in 2009.

And it isn’t just the $237 billion SPDR fund that’s thinning. Traders took $2.1 billion out of US mutual funds and ETFs in the week ended July 12, ICI data show. That compared with $5.1 billion that went into funds around the world. Bank of America Merrill Lynch’s most recent fund manager survey found allocation to US stocks is the most underweight since 2008.

“We’ve contributed to that because we’ve been moving money out of large-cap stocks in the US,” Ed Keon, managing director and portfolio manager at Quantitative Management Associates LLC, said by phone. “We’re not bearish, it’s just a question of better growth with lower valuations elsewhere.”

The S&P 500 touched new highs this week before retreating as an intensifying investigation into President Donald Trump stoked concern that his economic agenda may stall. The benchmark gauge added 0.5 per cent in the five days to end at 2,472.54. The Nasdaq 100 Index jumped 1.4 per cent, ending the week at a record 5,921.525. The Dow Jones Industrial Average slipped 0.3 per cent to 21,580.07.

Strong earnings growth this year has kept the S&P 500’s price-to-earnings multiple below its March peak, despite the index reaching all-time highs. Even so, most equity valuations outside the US remain more compelling.

In Europe, German and French shares trade at a trailing P/E of as low as 18.9, compared with the S&P 500’s 21.6. Japanese shares are at 19.2, and emerging-market stocks tracked by MSCI Inc. trade at 16.1. MSCI’s world index excluding the US trades at 19.7.

Utility shares led the S&P 500’s advance this week, climbing 2.6 per cent in their best performance since February as the 10-year Treasury yield dropped nine basis points. Real estate shares added 0.8 per cent.

Technology stocks rallied for the fourth week in five as the Nasdaq 100 Index jumped 1.4 per cent. Industrial and financial stocks weighed on the market.