NEW YORK, July 16 Investors in U.S.-based mutual
funds committed $660 million to stock funds in the week ended
July 9, with funds that hold international stocks attracting all
the new demand on the view that stocks are cheaper overseas,
data from the Investment Company Institute showed on Wednesday.
The net inflows into stock funds follow outflows of $7.8
billion over the previous week, which were the biggest since the
start of 2013.
Funds that specialize in U.S. stocks posted $1.1 billion in
outflows, while funds that mainly hold international stocks
attracted $1.7 billion, according to the data from ICI, a U.S.
mutual fund trade organization. Bond funds attracted $2.7
The outflows from U.S.-focused stock funds marked their 11th
straight week of withdrawals, while funds that specialize in
international stocks have attracted inflows every week since May
of last year, according to the ICI data.
"There may be better opportunity overseas in equity
markets," said Wayne Lin, portfolio manager at QS Investors in
New York. He said European stock valuations were attractive,
while U.S. equity valuations were "a little bit rich."
The benchmark S&P 500 stock index rose nearly 30
percent last year and has risen nearly 7 percent this year. The
index hit a record closing high on July 3 after a
stronger-than-expected U.S. nonfarm payrolls report for June.
While bond funds attracted net inflows, municipal bond funds
posted $482 million in outflows, marking their first withdrawals
since early January.
"The values just don't look all that compelling anymore,"
said Lin. He said prices on municipal bonds had gained after
selling at "deep discounts" at the start of the year.
Demand for bond funds overall has picked up on solid
performance. The benchmark Barclays U.S. Aggregate Bond Index is
up 3.7 percent this year through Tuesday.
Hybrid funds, which can invest in stocks and fixed income
securities, attracted $1 billion in new cash, up from inflows of
$636 million the prior week and marking their ninth straight
week of inflows.
The following table shows estimated ICI flows for the past
five weeks (all figures in millions of dollars)
7/9/2014 7/2 6/25 6/18 6/11
Total equity 660 -7,835 -91 -922 1,236
Domestic -1,072 -8,886 -1,353 -2,204 -1,840
World 1,733 1,052 1,262 1,282 3,075
Hybrid* 1,006 636 1,246 1,060 1,159
Total bond 2,729 2,978 3,249 4,159 2,112
Taxable 3,211 2,702 2,687 3,740 1,587
Municipal -482 276 562 419 524
Total 4,395 -4,221 4,403 4,297 4,506
*Hybrid funds can invest in stocks and/or fixed income
(Reporting by Sam Forgione; Editing by Bernadette Baum)