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Investors Pump $10b Into US Stock Funds

Investors Pump $10b Into US Stock FundsInvestors Pump $10b Into US Stock Funds

Investors pumped $10 billion into US-based stock funds in the week that ended Dec. 30, Lipper data showed on Thursday, demonstrating a willingness to take on risk at the end of a year that has delivered slim gains to financial markets.

Funds tracking foreign stocks took in money from both mutual fund and exchange-traded fund investors during the week–$9.3 billion in all, Lipper said–one week after such funds suffered a historic outflow, Reuters reported.

The new money should come as a relief to stockpickers and index-funds tracking the equity markets, whose funds had previously posted four consecutive weeks of outflows that totaled $30 billion as investors digested risks to the global economy and an interest-rate hike by the US Federal Reserve.

The $10 billion pulled out of “non-domestic” stock funds during the week ended Dec. 23 was the largest ever recorded by Lipper, whose data dates to 1992.

The week before that saw an outflow from investment-grade bond funds of $5.1 billion that was also the largest since such record-keeping began.

US taxable bond funds posted $1.8 billion in outflows over the past week, Lipper data showed, the sixth straight week of outflows.

Investment-grade debt funds continued to post outflows: this week the withdrawals totaled $1.7 billion. Yet even in bonds, there were green shoots of optimism.

Exchange-traded fund investors added net money to the funds even as mutual-fund owners pulled out. High-yield bond funds ended what had been a three-week streak of multibillion-dollar outflows, taking in $114 million in new money, as fears abated that tanking energy and commodity prices would sink debt-laden corporate issuers and fund managers who had feasted on such debt.

Emerging-market stock funds added $168 million in new money from investors, their first net inflows since October, according to Lipper. Money-market funds took in nearly $17 billion in new money during the week, according to the fund data service.

The Lipper fund flow data is compiled from reports issued by US-domiciled mutual funds and exchange-traded funds.

Financialtribune.com