Member access

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
12:11p Research from Research Institute Yields New Findings on Nanoscale Research (Chemically doped three-dimensional porous graphene monoliths for...
12:11p EDISUN POWER EUROPE : EQS-Adhoc: Edisun Power erwirbt 1.8 MW PV-Anlage auf Mallorca
12:11p SURF AIR : Partners with TEDWomen 2015 to Kick off of New Routes to Monterey, CA
12:10p AIR PRODUCTS & CHEMICALS : 28 May 2015 Air Products’ CFO to Speak at Deutsche Bank Global Industrials and Basic Materials Conference View News Release ?
12:10p RETAIL ESTATES : • 28/05/2015: Occasional press release: Rectification + disclosure pursuant to the Transparency Law
12:10p ACCORD FINANCIAL : Patience pays off with Accord Financial - Globe and Mail
12:10p HIGH LINER FOODS : Appoints Chris Mulder as Senior Vice President Foodservice Sales and Marketing
12:10p Findings on Nanoparticles Reported by Z. Osvath et al (The structure and properties of graphene on gold nanoparticles)
12:10p TOUR EIFFEL : Brief account of the Annual General Meeting
12:10p MOTA ENGIL : Notes “Mota-Engil US$ 2014/2018” Payment of Interests – Coupon nº2
Latest news
Advertisement
Hot News 
NETSCIENTIFIC : PDS Biotechnology reports positive Phase I results
RALLY SOFTWARE DEVELOPMENT : C O R R E C T I O N -- Bronstein, Gewirtz & Grossman, LLC/
ONE HORIZON : Aishuo App Now Supporting Chinese Mobile Payment Platforms; China UnionPay, Alibaba's Alipay and Tencent's Wechat Wallet
MARIMEDIA : Business and Trading Update
ASIAN BAMBOO A PETITION FOR INSOLVENCY PROCEEDINGS WILL BE FILE : Asian Bamboo AG: A petition for insolvency proceedings will be filed (DGAP Adhoc)
Most Read News
06:01a ROYAL DUTCH SHELL A : Shell Names China Boss To Key BG Merger Post
03:35aDJChevron Sells Stake in New Zealand Refinery
05:11a RBS may need to bulk up Williams & Glyn to improve competition
05/27DJSEMTECH : Results Hurt by Smartphone Customer Demand
05/27 PACIFIC ENVIRONMENT : Africa Australia Technical (AAT) Mining Conference 2015
Most recommended articles
12:09pDJU.S. Oil Prices Pare Losses on Supply Drop
12:08p U.S. pending home sales race to nine-year high in April
12:07p U.S. housing data, sturdy jobs market buoy growth outlook
12:04pDJRick Santorum's Message Reflects GOP's Economic Tilt
12:03p Less than one-in-three chance of Greece leaving euro zone this year