June 1, 2017 / 10:36 PM / 2 months ago

UPDATE 1-U.S.-based stock funds net cash after four-week drought -Lipper

3 Min Read

 (Adds details on mutual funds and ETFs, investor quote, table,
byline)
    By Trevor Hunnicutt
    NEW YORK, June 1 (Reuters) - Investors in U.S.-based
exchange-traded funds charged into stocks during the latest
week, Lipper data showed on Thursday, halting a four-week period
of reticence, as equities set record highs.
    U.S.-based stock ETFs swelled with $10.1 billion in new cash
during the week ended May 31, offsetting $915 million in
withdrawals from their mutual fund counterparts, which are more
heavily used by long-term-oriented retail investors.
    That pushed overall stock fund inflows, at $9.2 billion, to
their highest point since February and the first net positive
week since a sharp rally toward the end of April, according to
Lipper.
    Markets have managed to continue to trend higher since then,
with only scarce episodes of volatility, as solid global
earnings and economic growth have persisted. Opportunistic
buyers have also blunted any huge sell-offs in equities against
the backdrop of diminishing political risk in Europe after the
victory of centrist French president, Emmanuel Macron.
    Each of the major U.S. indexes - The Dow Jones Industrial
Average, S&P 500 and the Nasdaq Composite
- closed at all-time highs on Thursday.
    "I've never seen, in my career, anything like this," said
Rick Rieder, a veteran investor and global chief investment
officer of fixed income at BlackRock Inc, the world's
largest asset manager, about the amount of cash chasing a scarce
supply of financial assets.
    The CBOE Volatility Index, a closely watched
options-based take on the stock market sometimes called the
"Fear Index," posted is lowest ever end-of-month close in May.
    "The volatility markets, I would argue, are too sanguine
today," said Rieder.
    Domestic stock funds attracted the lion's share of the cash,
about $5.9 billion for the week, while funds focused on shares
abroad pulled in $3.3 billion, according to the Thomson Reuters
research service Lipper.
    Taxable bond funds attracted $1.4 billion over the same
period, Lipper said, in their eleventh straight week of inflows.
    The following is a broad breakdown of the flows for the
week, including mutual funds and exchange-traded funds:
 Sector                    Flow Chg  % Assets  Assets     Count
                           ($blns)             ($blns)    
 All Equity Funds          9.234     0.16      5,887.808  11,371
 Domestic Equities         5.921     0.14      4,109.704  8,139
 Non-Domestic Equities     3.313     0.19      1,778.103  3,232
 All Taxable Bond Funds    1.383     0.06      2,414.523  5,740
 All Money Market Funds    2.525     0.12      2,148.433  973
 All Municipal Bond Funds  -0.051    -0.01     382.425    1,385
 
 (Reporting by Trevor Hunnicutt; Editing by Jennifer Ablan and
James Dalgleish)
  

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