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U.S.-based stock funds gain $11.26 billion as Dow run continues: Lipper
NEW YORK |
NEW YORK (Reuters) - Investors in U.S.-based funds poured $11.26 billion in new cash into stock funds in the latest week, the most since late January, as the Dow Jones industrial average extended its streak of record highs, data from Thomson Reuters' Lipper service showed on Thursday.
Investors heavily favored the U.S. and gave $8.72 billion to mutual funds and exchange-traded funds that hold U.S. stocks in the week ended March 13, the most since the first week of the year.
The latest inflows into funds that hold U.S. stocks more than doubled the previous week's cash gains of $4.05 billion, when the Dow first touched record highs on March 5 and 6th. The total inflows into stock funds also far exceeded the prior week's inflows of $5.67 billion.
The Dow hit record closing highs on every day of the weekly reporting period. The nine-day winning streak marked the longest consecutive run since November 1996.
The benchmark S&P 500 also rallied, and was 1 percent away from an all-time intraday high set in 2007 on March 13.
"People are betting that the record will be breached by the S&P 500," said Tom Roseen, head of research services at Lipper.
Demand for exchange-traded funds that hold U.S. stocks dominated the inflows. Investors bet $7.32 billion on the funds, the most since mid-September of 2012.
The inflows also far surpassed the prior week's cash gains of $3.3 billion. The SPDR S&P 500 ETF Trust raked in $3.9 billion over the latest week.
The opportunistic moves into ETFs showed investors capitalizing on the stock market rallies. The S&P 500 was up 1.4 percent over the entire week, while the Dow rose 1.7 percent.
The new money into ETFs overshadowed inflows of $1.4 billion into mutual funds that hold U.S. stocks. Those were still the highest inflows since the last week of January, however, when they pulled in $2.9 billion.
ETFs are generally believed to represent the investment behavior of institutional investors, while mutual funds are thought to represent the retail investor.
Funds that hold stocks outside the U.S. captured $2.54 billion in inflows over the week, the most in three weeks. Mutual funds that hold the stocks pulled in $1.57 billion, while the ETFs gained $966.3 million.
Positive signs of strength in the economy and the Federal Reserve's easy monetary policy have advanced the rally in stocks. U.S. Labor Department Data showing greater-than-expected jobs growth last month and a drop in the unemployment rate to a four-year low of 7.7 percent.
The markets received another push after the U.S. government reported at the end of the week that retail sales grew 1.1 percent in February, the biggest rise since September.
Bond funds had their weakest turnout this year as investors committed just $1.23 billion. That is the least amount of inflows since the funds suffered outflows of $331.2 million over the week ended January 2.
Bond mutual funds took in $1.81 billion in new cash, while bond ETFs suffered outflows of $579.12 million. Those marked the largest redemptions in five weeks.
Investors soured on high-yield "junk" bond funds and redeemed $418.1 million. That marked a loss in favor for the bonds after the funds reaped $820 million in inflows the previous week.
Investors are taking profits from high-yield as they bet on equities rising higher, said Roseen of Lipper.
Instead, investors sought higher-quality in investment-grade corporate bond funds, to which they committed $2.13 billion. That amount marked the highest inflows into the funds since the first week of the year.
As investors crowded into U.S. stock ETFs over the week, money market funds suffered outflows of $2.4 billion. Those outflows were, however, much less than the prior week's outflows of $12.9 billion.
Corporate loan funds, which offer "floating" rates that are protected against rising interest rates, reaped $1.2 billion in inflows over the week. That amount exceeded the prior week's inflows of $1.06 billion.
The weekly Lipper fund flow data is compiled from reports issued by U.S.-domiciled mutual funds and exchange-traded funds.
(Reporting by Sam Forgione; Editing by Diane Craft)
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