Stock funds worldwide gain $19.7 billion inflow: Bank of America

NEW YORK Fri Jul 19, 2013 9:18am EDT

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NEW YORK (Reuters) - Investors worldwide poured $19.7 billion into stock funds in the latest week as U.S. stocks hit record highs, a report from Bank of America Merrill Lynch said Friday.

The inflows into stock funds in the week ended July 17 were the largest in six months, the report said, also citing data from fund-tracking firm EPFR Global.

The S&P 500 and Dow Jones industrial average hit record highs for three consecutive sessions at the start of the week on strong corporate earnings and hints that the Federal Reserve's stimulus is unlikely to slow soon. The S&P 500 rose 1.7 percent over the weekly period.

Bond funds worldwide, meanwhile, suffered outflows of just $700 million. Funds that hold riskier high-yield junk debt, however, reaped inflows of $4 billion in the latest week, the largest weekly inflow since October 2011, the report said.

Funds that hold municipal bonds suffered outflows of $1.7 billion over the week, while emerging market debt funds had outflows of $1.3 billion.

Funds that hold Treasuries suffered outflows of $1.1 billion, even as prices rose on the benchmark 10-year Treasury. The yield on the safe-haven bond fell 18 basis points to 2.49 percent over the reporting period. When yields fall, prices rise.

Funds that hold floating-rate bank loans gained inflows of $1.8 billion, their 56th straight week of inflows, according to Bank of America Merrill Lynch. Floating-rate bank loans are protected from rising interest rates by being pegged to floating-rate benchmarks.

(Reporting by Sam Forgione; Editing by Chizu Nomiyama)

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