March 30, 2017 / 11:57 PM / 4 months ago

UPDATE 1-Investors tip-toe back to U.S. stock funds

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 (Adds details on mutual funds and ETFs, analyst quote, table,
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    By Trevor Hunnicutt
    NEW YORK, March 30 (Reuters) - Investors grew more confident
during the latest week, reversing last week's withdrawals from
U.S.-based stock funds, data from Lipper showed on Thursday.
    Stock funds in the United States attracted $1.8 billion over
the week ended March 29, including $402 million in domestic
funds and $1.4 billion invested abroad, the research service's
data showed.
    Last week, reeling from a breakdown of the effort by U.S.
President Donald Trump and his Republican party to dismantle
Obamacare, investors pulled $4.8 billion from domestic equity
funds.
    Markets have rebounded in recent days, with the Nasdaq
Composite index gaining for five straight days against a
backdrop of strong economic data. Healthcare sector funds were a
winner during the latest week, pulling in $96 million and
breaking a two-week streak of outflows.
    "People were betting the economy's going to do OK and this
was just a bump in the road," said Tom Roseen, head of research
services at Thomson Reuters Lipper. "I'm not sure that all the
investors believe that it was a total defeat and that his agenda
is going to fall."
    But bank sector funds posted $611 million in outflows, their
third week in a row of withdrawals, and the continued unwinding
of a trade that has been popular since Trump's election amid
promises of regulatory cuts.
    Energy sector funds posted $267 million in outflows, the
largest withdrawals since January. Oil prices have been pummeled
this month but staged a bit of a rebound this week.
    The stream of cash flowing into international stock funds
has lasted the better part of the year as investors shift some
exposure from pricey U.S. stocks. Investors are finding relative
bargains in Europe and emerging markets as global growth seems
to take hold.
    U.S.-based emerging markets stock funds gathered $1.1
billion in their 13th consecutive week of inflows.
    European stock funds reeled in $934 million and the most
cash since June 2015 despite Britain formally announcing its
intention to leave the European Union and a two-round French
vote starting April 23 that has also jolted markets.

    Bond funds remained popular, attracted $5.6 billion during
the week. Investment-grade corporate bond funds pulled in $4
billion, their 15 straight week of inflows. But concerns about
lofty valuations in riskier debt persist.
    High-yield junk bond funds posted $248 million in
withdrawals, the fourth week of outflows in the past five,
according to Lipper.
    The following is a broad breakdown of the flows for the
week, including mutual funds and exchange-traded funds:
 Sector                    Flow Chg  % Assets  Assets     Count
                           ($blns)             ($blns)    
 All Equity Funds          1.785     0.03      5,792.521  11,696
 Domestic Equities         0.402     0.01      4,106.706  8,358
 Non-Domestic Equities     1.383     0.08      1,685.816  3,338
 All Taxable Bond Funds    5.577     0.23      2,385.936  5,914
 All Money Market Funds    -1.623    -0.07     2,322.917  1,032
 All Municipal Bond Funds  0.265     0.07      373.738    1,410
 
 (Reporting by Trevor Hunnicutt; Editing by Cynthia Osterman)
  

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