(Adds additional flows, analyst comment)
By Sam Forgione
NEW YORK, July 31 Investors in U.S.-based funds
poured a net $7.6 billion into stock funds in the week ended
July 30 on optimism that U.S. stocks could climb further, data
from Thomson Reuters' Lipper service showed on Thursday.
The net inflows were the biggest in seven weeks and reversed
the prior week's net outflows of $7.6 billion. All of the
inflows went into exchange-traded funds, which attracted $7.9
billion, while mutual funds posted $303 million in outflows.
ETFs are thought to represent the behavior of the
institutional investor, while mutual funds are commonly
purchased by retail investors.
"Expectations are that earnings are going to improve in
coming quarters," said Barry Fennell, senior research analyst at
He said investors likely sought exposure to U.S. stocks on
optimism that they could rise after a dip in the latest week,
which partly occurred on weak second-quarter earnings from
companies such as Amazon.com and UPS.
The benchmark S&P 500 index, which has risen roughly
6.6 percent this year through Wednesday, fell 0.9 percent for
the period, while MSCI's all-country world index
fell 0.7 percent over the week.
Emerging market stock funds attracted $1.2 billion, marking
their biggest inflow in seven weeks. Fennell said some
expectations for a continued dovish stance from the Federal
Reserve in its policy statement on Wednesday boosted sentiment
toward emerging market stocks.
Taxable bond funds attracted $1.2 billion, marking their
sixth straight week of inflows. Funds that hold riskier
high-yield junk bonds posted $1.5 billion in outflows, however,
marking their third straight week of outflows.
Funds that hold floating-rate bank loans, which are
protected from rising interest rates, posted $406 million in
outflows, marking their third straight week of withdrawals.
Junk bonds are "definitely over-valued" while investors are
also wary of valuations on floating-rate loans, said Lipper's
Emerging market bond funds, like their stock counterparts,
also attracted new cash. They attracted inflows of $514 million,
their biggest since early June.
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 Pct Assets Count
($ bln) Assets ($ bln)
All Equity Funds 7.592 0.18 4,233.513 10,900
Domestic Equities 5.432 0.17 3,124.664 7,938
Non-Domestic Equities 2.160 0.19 1,108.849 2,962
All Taxable Bond 1.198 0.07 1,817.797 5,536
All Money Market -3.601 -0.16 2,269.197 1,307
All Municipal Bond 0.419 0.14 294.240 1,430
(Reporting by Sam Forgione; Editing by Diane Craft and Dan