NEW YORK, April 2 Investors in U.S.-based mutual
funds poured $1.2 billion into stock funds in the week ended
March 26 on the potential for more monetary easing from China
and the European Central Bank, data from the Investment Company
Institute showed on Wednesday.
The net inflows into stock funds more than reversed outflows
of $962 million the previous week, which marked the first weekly
withdrawals since last December. Bond funds, meanwhile,
attracted $1.3 billion in new cash.
Inflows of $1.5 billion into funds that mainly hold non-U.S.
stocks accounted for the net inflow into stock funds. Funds that
specialize in U.S. stocks posted $267 million in outflows,
marking their second straight week of withdrawals.
Traders hoped for a fresh round of stimulus from China to
prop up weaker growth, while ECB governing council member and
Bundesbank chief Jens Weidmann said March 25 that the ECB could
consider purchasing euro zone government bonds or top-rated
private sector assets.
Investors likely jumped into European stocks ahead of a
potential ECB push for further monetary easing, said Michael
Jones, chief investment officer at RiverFront Investment Group
in Richmond, Virginia.
"If they should do quantitative easing at the ECB, it will
be too late to jump on that rocketship after they announce it,"
Jones said. The ECB's next policy meeting is Thursday.
The outflows from funds that mainly hold U.S. stocks came
amid escalating East-West tensions surrounding the situation in
Ukraine. The Standard & Poor's 500 stock index dipped 0.4
percent over the weekly period.
The inflow marked the seventh straight week of net inflows
into the funds, extending the funds' streak, which began in
mid-February. The inflows also followed record annual outflows
of $83.4 billion from bond funds in 2013, according to ICI data.
Municipal bond funds posted just $49 million in inflows,
marking the weakest demand for the funds in 11 weeks. Analysts
have noted that municipal bonds tend to face weakness during tax
season. Federal and state income taxes are due April 15.
Hybrid funds, which can invest in stocks and fixed-income
securities, attracted $966 million in new cash, down from
inflows of $1.8 billion the prior week.
The following table shows estimated ICI flows for the past
five weeks (all figures in millions of dollars):
2/26/14 3/5 3/12 3/19 3/26
Total Equity 5,018 5,391 4,227 -962 1,234
Domestic 3,165 1,946 1,908 -3,804 -267
World 1,854 3,445 2,318 2,842 1,501
Hybrid* 1,640 1,110 1,939 1,822 966
Total Bond 2,354 3,790 5,303 2,481 1,275
Taxable 1,695 3,035 4,742 2,244 1,227
Municipal 659 756 561 237 49
Total 9,012 10,291 11,469 3,341 3,476
*Hybrid funds can invest in stocks and/or fixed-income
(Reporting by Sam Forgione, editing by G Crosse)