February 27, 2019 / 6:41 PM / in 2 months

U.S. investors jump back into domestic stock funds as market rallies

    By David Randall
    NEW YORK, Feb 27 (Reuters) - U.S. investors jumped back into
domestic stock funds during the week that ended Feb. 20 amid the
best start to a year for the S&P 500 since 1987, breaking a
five-week streak in which investors pulled money out of the
rising market, according to data released Wednesday by the
Investment Company Institute. 
    Overall, mutual funds and exchange traded funds that focus
on U.S. stocks netted approximately $965 million last week, the
first positive inflow for the category since the $6.6 billion in
positive inflows during the week ended Jan. 9, ICI data showed.
Investors pulled a net of $22.5 billion out of domestic stock
funds between mid-January and late February. 
    The benchmark S&P 500 is up approximately 11.1 percent since
the start of the year, thanks in part to signs that the Federal
Reserve is slowing its pace of interest rate hikes and a move by
Congress to avoid another government shutdown. The Russell 2000
index of small and mid-cap companies is up nearly 17 percent
over the same time. 
    The move into domestic stocks came at the expense of world
stock funds, which with a decline of $1.17 billion suffered
their first outflows since the week that ended Jan. 2. Investors
have sent approximately net $13.2 billion into world stock
mutual funds and ETFs since the start of the year. An MSCI index
of world stocks excluding the U.S. market is up nearly 10
percent for the year to date. 
    Bonds funds and ETFs continued their seven-week stretch of
positive inflows. Taxable bond funds netted approximately $6.1
billion during the week, while municipal bond funds netted $2.4
billion. 
    The following table shows estimated ICI flows for mutual
funds and ETFs (all figures in millions of dollars):
                   2/20/19  2/13/19   2/6/19  1/30/19    1/23/19
 Equity               -205        6    1,269  -13,645      1,485
         Domestic      965     -155   -2,863  -14,039       -571
         World      -1,169      161    4,132      394      2,056
 Hybrid               -858     -880      710     -531        355
 Bond                8,568    9,738   16,091    7,771      6,798
         Taxable     6,096    6,753   13,130    5,824      5,367
         Munis       2,472    2,985    2,961    1,947      1,431
 Commodity            -133     -353     -621      767        584
 Total               7,373    8,511   17,449   -5,639      9,222
 
 (Reporting by David Randall; Editing by Cynthia Osterman)
  
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