By Trevor Hunnicutt
NEW YORK, Feb 22 Investors galloped into stocks
for the third straight week, delivering U.S.-based funds
invested in companies abroad the most cash since August 2015,
Investment Company Institute data released on Wednesday show.
World stock funds attracted $5.3 billion, the most since
August 2015, the trade group said, as investors built up bets in
relatively low-priced markets.
"There is a perennial value investor who recognizes that
we've had one of the biggest gaps in relative performance over
the last 5 years between the U.S. and internationally that we've
had," said Rod Smyth, chief investment strategist at RiverFront
Investment Group LLC.
"Maybe this will be the year where they finally keep up or
do a little better."
Investors could be excused for showing skepticism. In the
ten years through 2016, the S&P 500 gained 6.9 percent a
year. The MSCI ACWI index, which includes the
United States and 45 other countries, gained just 4.1 percent a
year over that period.
Investors who snapped up international stock funds in 2015
were met with an oil price collapse and a Chinese currency
devaluation that August. In more recent months, concerns over
Britain's exit from the European Union and Japanese monetary
policy have weighed on the funds.
After pouring $203 billion into the funds in 2015, investors
pulled $4.4 billion last year, according to ICI.
Returns have picked up in recent months, with the MSCI ACWI
gaining 12 percent since July and charting new records.
Economic data this month in China showed inflation, imports
and exports all gaining steam, helping commodity prices and
offering new evidence that the global economy is building
Investors poured $1.5 billion into emerging market stock
funds during the latest week, earlier data from Thomson Reuters
Lipper showed, marking the funds' seventh straight week of
inflows and the biggest haul since last August.
At the same time, many investors are pointing to the
European and Japanese stock markets as offering a bargain.
But Smyth said the gains or price momentum in international
stocks still have not been impressive compared with domestic
"The value side is pulling us toward international markets,
and the momentum side is saying, 'Em, not yet,'" he said.
U.S.-based equity funds overall attracted more than $13
billion during the week through Feb. 15, according to the ICI.
U.S.-based bond funds attracted $8.6 billion, their eighth
straight week of inflows.
The following table shows estimated ICI flows, including
mutual funds and exchange-traded funds (all figures in millions
2/15 2/8 2/1 1/25 1/18/2017
Equity 13,314 5,492 15,045 -3,933 -1,292
-Domestic 8,059 814 11,769 -8,249 -3,748
-World 5,255 4,678 3,276 4,315 2,457
Hybrid -52 155 -567 -549 -106
Bond 8,594 11,615 9,388 8,158 4,655
-Taxable 7,977 10,705 8,511 7,637 3,531
-Municipal 616 911 877 521 1,124
Commodity 327 1,061 413 -492 231
Total 22,182 18,323 24,279 3,185 3,488
(Reporting by Trevor Hunnicutt; Editing by Meredith Mazzilli)