Log in
Login
Password
Remember
Lost password
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesHot NewsMost Read NewsRecomm.Business LeadersVideosCalendar 

Stock funds attract $7.14 billion as Dow hits record highs: EPFR

03/08/2013 | 03:48pm US/Eastern

Fund investors worldwide placed $7.14 billion in stock funds in the latest week as the Dow Jones industrial average <.DJI> hit record highs and global markets rallied, data from EPFR Global showed on Friday.

Inflows into stock funds in the week ended March 6 trounced the prior week's cash gains of $1.2 billion. Appetite for U.S. stocks largely accounted for the inflows, as $4.95 billion flowed into funds that hold the stocks, reversing the prior week's redemptions of $411 million.

"A stock market rally attracts new money, and we believe the market conditions remain favorable," said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.

The inflows came on the heels of the Dow's record closing high of 14,253.77 points on March 5, surpassed a day later. Loose policies of monetary easing from the U.S. Federal Reserve and signs of growth in the U.S. economy contributed to the rise.

The MSCI world equity index <.MIWD00000PUS>, meanwhile, rose 1.6 percent over the weekly reporting period.

The inflows into U.S. stock funds were largely opportunistic bets on exchange-traded funds, EPFR Global said.

So far this year, investors worldwide have poured more than $21 billion into funds that hold U.S. stocks, after redeeming $71.8 billion from the funds last year as they favored stable returns in bonds.

Appetite for equities serves as a barometer of investor confidence and how people feel about the economy.

Funds that hold world stocks saw another week of high demand with inflows of $1.6 billion. The funds took in more than $2 billion in new cash the prior week.

The big flows into U.S. stocks overshadowed demand for emerging market stocks, as just $102 million flowed into emerging market stock funds. That amount, albeit small, is an improvement from outflows of $1.07 billion the prior week.

Investors withdrew $290 million from European stock funds, despite expectations that the European Central Bank would maintain its loose monetary policy at a meeting.

Concerns remained, however, that political instability in Italy could reignite the euro zone debt crisis.

The benchmark S&P 500 <.SPX> rose 1.7 percent over the reporting period as investors shrugged off risks to the U.S. economy stemming from $85 billion in federal spending cuts, as well as political turmoil in Italy.

The Federal Reserve's commitment to continue its monetary easing fueled the rally, along with positive U.S. economic data such as a drop in new U.S. claims for jobless benefits, growth in U.S. factory activity, and a rise in consumer sentiment in February.

Investors also sought profits in high-yield "junk" bond funds, to which they gave $1.9 billion, the most since mid-September. Many view high-yield bonds as a risk asset, and yet a safer alternative to stocks.

"It's a reach for yield," said Colleen Denzler, global head of fixed income strategy at Janus Capital Group, which had about $157 billion in assets at the end of last year.

"Until there's a liquidity shock, or a default shock, or a credit shock, that trend will continue," Denzler said.

Bond funds overall reaped inflows of $4.5 billion in the latest week, slightly below cash gains of $4.68 billion the previous week. Funds that hold U.S. bonds took in $3.86 billion of the new money.

Denzler of Janus Capital said that despite rallies in the stock market, many investors are still unwilling to take risks in stocks.

Investors "like stocks, they've been going into stocks, but they remember what happened in 2008, and they're scared," she said.

Funds that hold emerging market bonds attracted just $409 million in new money, a weak turnout after attracting inflows of more than $1 billion in the first six weeks of the year. The inflows are the least since last July, EPFR Global said.

The move out of European stocks also applied to the region's bond funds, which suffered redemptions of $974 million over the week

(Reporting by Sam Forgione; Editing by David Gregorio)

By Sam Forgione

React to this article
Latest news
Date Title
08:55pDJShanghai Market Slide Is Still Far Short of 2008 Plunge
08:55p WHITE ROCK MINERALS : 20150630 Extensive Sulphide Alteration Confirmed
08:49p Oil prices tumble after Greek no vote to bailout, China stock market turmoil
08:45p BANK OF JAPAN : Statement by the Governor
08:42p China state media see a 'rainbow' after latest steps to stabilize slumping stocks
08:41p BOJ's Kuroda says Japan financial system remains stable
08:40p HONDA MOTOR : Tamarac motorcyclist killed heading home from birthday dinner in Delray Beach
08:40p GNI : F351 Phase II Clinical Trials in China Initiated
08:40p XIEZHONG : Notice of Extraordinary General Meeting
08:35pDJSuicide Bomb Attack Targets Nigerian Church
Latest news
Advertisement
Hot News 
NATERA : Nasdaq: NTRA) to Ring The Nasdaq Stock Market Opening Bell in Celebration of IPO
UBISENSE : Hit By Contract Delays, To Restructure Operations
SEAE HLDG : SeaSpine Holdings Corporation Begins Trading on NASDAQ
OUTSOURCERY : New Debt Facilities from Vodafone
STADIUM : Trading In Line With China Facility Relocation On Track
Most Read News
06:10p LIPPO MALLS INDONESIA RETAIL : Drawdown Of The Term Loan Facility And Use Of Proceeds
06:19p BOOKS A MILLION : Lee Greenwood to sign his new children's book in Mt. Juliet
06:47p SAMSUNG ELECTRONICS : faces lawsuit from China over smartphone 'bloatware'
06:50p AMA : Additional Placement Information LR 3.10.5A
07:22p Britain's banks call on government to phase out industry levy
Most recommended articles
08:55pDJShanghai Market Slide Is Still Far Short of 2008 Plunge
08:49p Oil prices tumble after Greek no vote to bailout, China stock market turmoil
08:42p China state media see a 'rainbow' after latest steps to stabilize slumping stocks
08:41p BOJ's Kuroda says Japan financial system remains stable
08:35pDJSuicide Bomb Attack Targets Nigerian Church