By Trevor Hunnicutt
NEW YORK, May 17 U.S. fund investors are
snapping up foreign stocks, giving international equity managers
the most cash in two years, Investment Company Institute data
for the latest week showed on Wednesday.
U.S.-based funds that primarily buy stocks outside of the
country attracted $8.2 billion in the week ended May 10, while
investors pulled $991 million from domestic equity funds, the
trade group said.
That is the best week for the foreign-focused funds since
April 2015 as European stocks rallied on hopes of growth sparked
by very easy monetary policy.
The latest reporting period for flows included the days
following the victory of centrist Emmanuel Macron over far-right
candidate Marine Le Pen in the French presidential runoff but
came before Wednesday's selloff.
In U.S.-dollar terms, the Pan-European Stoxx Europe 600
has returned 16.8 percent this year, compared to the
S&P 500's 6.9 percent return in the United States.
"International equities have performed very well in 2017 and
yet many U.S. investors have been underexposed. The strong
relative returns, coupled with improved sentiment in Europe
following the Macron election, has likely sparked greater
interest," said Todd Rosenbluth, director of ETF and mutual fund
research at CFRA.
"However, if investors become nervous about U.S. equity
markets, a focus on taxable bond funds will persist."
Taxable bond funds attracted $5.7 billion in their 23rd
straight week attracting cash, ICI said.
Commodity funds, including those that buy safe-haven gold,
pulled in $288 million. That is their first week netting cash
out of the last three weeks.
The following table shows estimated ICI flows, including
mutual funds and exchange-traded funds (all figures in millions
5/10 5/3 4/26 4/19 4/12/2017
Equity 7,243 3,534 11,601 4,725 3,101
-Domestic -991 -4,264 6,757 1,253 -2,666
-World 8,234 7,798 4,844 3,472 5,767
Hybrid 121 -1,387 566 -596 -665
Bond 6,353 7,171 8,614 3,229 4,275
-Taxable 5,717 6,937 7,960 2,743 2,963
-Municipal 636 234 653 487 1,312
Commodity 288 -14 -7 740 111
Total 14,004 9,305 20,774 8,099 6,821
(Reporting by Trevor Hunnicutt; Editing by Tom Brown)