UPDATE 1-U.S.-based stock funds have $18.1 bln inflows in latest week -Lipper

Thu Sep 19, 2013 5:30pm EDT

NEW YORK, Sept 19 (Reuters) - Investors in funds based in the United States poured $18.1 billion into stock funds in the latest week as global markets rallied on expectations the Federal Reserve would maintain its easy money policies, data from Thomson Reuters' Lipper service showed on Thursday.

The inflows into stock funds over the week ended Sept. 18 were the biggest since early January.

U.S. shares surged to record highs on Wednesday, the last day of Lipper's reporting period, after the Fed said it would maintain the pace of its $85 billion in monthly bond purchases and await more evidence of solid economic growth.

The Standard & Poor's 500 stock index and the Dow Jones Industrial average hit record highs after the Fed decision. Global equity markets also gained after former U.S. Treasury Secretary Lawrence Summers on Sunday withdrew from consideration to be the next Fed chairman.

The MSCI world equity index rose 1.6 percent over the reporting period, while the S&P 500 index rose 2.2 percent.

Taxable bond funds, meanwhile, attracted $1.4 billion over the weekly period, marking the biggest inflows into the funds in eight weeks. Yields on benchmark 10-year U.S. Treasury notes fell over the weekly period ahead of the Fed meeting, and plunged 17 basis points following the decision. As yields fall, prices rise.

Among all categories of taxable bond funds, riskier high-yield junk bond funds took in $1.4 billion in the latest week.

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