NEW YORK Investors worldwide poured a net $14.3 billion into stock funds in the latest week amid strong global economic data and reduced fears of a U.S. strike on Syria, data from a Bank of America Merrill Lynch Global Research report showed Friday.
The flows into stock funds in the week to September 11 were the largest in two months, according to the report, which also cited data from fund-tracker EPFR Global. The inflows were also the first in four weeks and reversed outflows of $11.4 billion from the funds the previous week.
Data showing growth in the U.S. services sector and positive Chinese economic data helped lift global stocks over the reporting period, while the likelihood fell of a U.S. military strike on Syria.
Over the week, a resolution authorizing military strikes against Syria in retaliation for an alleged chemical weapons attack against its civilians appeared less likely to pass the U.S. legislature. Diplomatic efforts to allow Syria to surrender its chemical weapons, averting a U.S. strike, also calmed investors.
Inflows of $12 billion into stock exchange-traded funds accounted for most of the inflows into stock funds in the latest week. ETFs are generally believed to represent the investment behavior of institutional investors, while mutual funds are thought to represent the retail investor.
U.S. stock funds attracted $5.9 billion in new cash, the first inflows in five weeks. The S&P 500 stock index rose 2.2 percent over the period.
Emerging market stock funds attracted $2.6 billion, marking the biggest inflows into the funds in seven months, according to the report, which also cited data from fund-tracker EPFR Global. The MSCI emerging equities index rose 5.8 percent over the period.
Japanese stock funds pulled in $1.1 billion, marking the largest inflows into the funds in four months, the report said. Japan's Nikkei average hit a five-week high of 14,238.42 on September 9 after Tokyo won its bid to host the 2020 Olympics and got an upgrade of second-quarter economic growth.
European stock funds worldwide also had inflows of $2.2 billion, marking the 11th straight week of new demand for the funds and up from inflows of $800 million the prior week. The FTSEurofirst 300 index of top European shares rose 2.7 percent over the reporting period.
Globally, bond funds, had outflows of $3.5 billion, up from the prior week's outflows of $300 million and marking the seventh straight week of outflows from the funds.
The yield on benchmark 10-year U.S. Treasury notes remained high and ended the week at 2.91 percent. The yield on the safe-haven bond briefly rose above 3 percent on September 5, a level not seen since July 2011. Bond yields move inversely to their prices.
Precious metals funds had inflows of $100 million, marking the fourth straight week of new demand for the funds.
Positive economic data, uncertainty over whether the Fed would scale back its stimulus, and reduced tensions over Syria whipsawed the price of spot gold over the latest week, causing it to touch a three-week low of $1,356.85. on September 11.
(Reporting by Sam Forgione; Editing by James Dalgleish and W Simon)