(Adds additional flows, analyst comments, table)
By Sam Forgione
NEW YORK, May 1 Investors in U.S.-based funds
poured $4.2 billion into stock funds in the week ended April 30
after strong corporate earnings from companies such as Apple
and Facebook boosted sentiment, data from
Thomson Reuters' Lipper service showed on Thursday.
The inflows into stock funds marked their strongest demand
in three weeks. Stock mutual funds, which are commonly purchased
by retail investors, attracted $1.6 billion of the net inflows,
while stock exchange-traded funds attracted $2.6 billion. Stock
ETFs are thought to represent the institutional investor.
"People are looking optimistically at equities as the market
leader," said Jeff Tjornehoj, head of Americas research at
Lipper, on the greater demand for stocks over the week. Taxable
bond funds attracted just $711 million over the weekly period.
Emerging markets stock funds attracted $352 million in
inflows, marking their sixth straight week of inflows. Investors
have poured cash into the funds in recent weeks on growing
comfort that the Federal Reserve's pullback in its bond-buying
program has proceeded smoothly, Tjornehoj of Lipper said.
The benchmark Standard & Poor's 500 stock index rose
0.5 percent over the weekly period on strong corporate results
and the Fed's view that the U.S. economy was showing signs of
strength despite weak data for the first quarter.
The Dow also closed at its first record high of 2014
on Wednesday after the Fed's gave its upbeat economic outlook as
it announced another cut to its massive bond-buying program.
The inflows in the taxable bond funds were the smallest in
eight weeks. Riskier high-yield bond funds posted $631 million
in outflows, marking their biggest outflows since February.
Investment-grade bond funds posted $74 million in outflows,
marking their first withdrawals since October 2013.
"Investors are thinking that prospects are looking more
favorable for stocks than bonds," Tjornehoj said on the outflows
from corporate bonds.
Floating-rate loan funds posted $663.7 million in outflows,
marking their biggest outflows since August 2011. Analysts have
said the belief that the Fed will not raise rates earlier than
expected has hurt demand for the funds, which are protected from
rising interest rates by being pegged to floating-rate
Funds that mainly hold safe-haven U.S. Treasuries attracted
$440 million in inflows, marking their second straight week of
new demand. Funds that hold inflation-protected bonds such as
Treasury Inflation-Protected Securities attracted $174 million,
marking their second straight week of new demand after five
weeks of outflows.
"I would speculate that a softer, more dovish Fed is
encouraging some investors to more strongly consider inflation,"
The strong inflows into stock funds showed investors putting
more money to work. Investors pulled $5.5 billion out of money
market funds, which are low-risk vehicles that typically invest
in safe short-term securities, after committing $4.9 billion to
the funds the previous week.
The weekly Lipper fund flow data is compiled from reports
issued by U.S.-domiciled mutual funds and exchange-traded funds.
The following is a broad breakdown of the flows for the
week, including exchange-traded funds (in $ billions):
Sector Flow Chg % Assets Assets Count
All Equity Funds 4.158 0.10 4,018.982 10,715
Domestic Equities 2.127 0.07 2,974.824 7,823
Non-Domestic 2.031 0.20 1,044.158 2,892
All Taxable Bond 0.711 0.04 1,754.356 5,403
All Money Market -5.542 -0.24 2,274.888 1,316
All Municipal Bond -0.026 -0.01 286.400 1,442
(Reporting by Sam Forgione; Editing by Diane Craft)