(Adds additional flows, market performance, investor comment)
By Sam Forgione
NEW YORK, July 11 Fund investors worldwide
poured $5.5 billion into stock funds in the week ended July 9 as
a stronger-than-expected June U.S. jobs report bolstered hopes
for better U.S. economic growth, data from a Bank of America
Merrill Lynch Global Research report showed on Friday.
The inflows marked the second straight week of new cash into
the funds and exceeded the prior week's $1.4 billion in inflows,
according to the report, which also cited data from fund-tracker
EPFR Global. Funds that specialize in U.S. stocks pulled in $600
million after posting a sizable $3.7 billion in outflows the
prior week. Bond funds attracted $3.6 billion.
Emerging market stock funds attracted $1.4 billion of the
net inflows to notch their fifth straight week of new demand,
while Japanese stock funds attracted $700 million after flat
flows the prior week.
Despite a decline in stock markets worldwide over the weekly
period on hesitation ahead of second-quarter earnings reports
and a surprise drop in German industrial output, Labor
Department data on July 3 showing U.S. employers added 288,000
jobs in June and the unemployment rate fell to a near six-year
low of 6.1 percent drove inflows into stock funds.
"The U.S. has had a really hard time getting a virtuous
cycle going where hiring leads to more hiring," said Michael
Jones, chief investment officer of RiverFront Investment Group
in Richmond, Virginia. "This nonfarm payrolls report, and the
revisions to prior ones, give some hope that at long last we're
seeing that virtuous cycle unfold."
Despite slipping 0.1 percent over the period, the benchmark
S&P 500 stock index hit a record closing high after the
jobs report, while the Dow industrials also closed at a
record high and passed the 17,000 milestone.
Precious metals funds attracted $1 billion, marking their
biggest inflows since Sept. 2012. Gold was up 0.7 percent
at $1,328.10 an ounce at the end of the period.
The inflows into bond funds marked the third straight week
of new money. Investment-grade bond funds attracted $3.2 billion
of the net inflows, while riskier high-yield funds saw no
inflows after attracting $1.1 billion the prior week.
The release of the minutes from the Federal Reserve's June
policy meeting and some fears of investing in stocks at record
highs helped push inflows into bond funds, said Jones of
"They didn't alarm anyone in terms of imminent rate
increases," Jones said on the Fed minutes. Investors are
watching the Fed for signs of when the central bank will raise
interest rates from rock-bottom levels, which would hurt bond
Funds that hold inflation-protected Treasuries (TIPS)
attracted $300 million, marking their third straight week of
inflows. Investors are also eyeing inflation, which currently
remains below the Fed's 2 percent target.
(Reporting by Sam Forgione; Editing by Chizu Nomiyama and