NEW YORK, March 4 Funds that invest in world
stocks attracted $55.1 billion in new cash from investors in the
first two months of the year, a record sum according to research
firm TrimTabs Investment Research.
The funds, which include mutual funds and exchange-traded
funds based in the United States that hold world stocks,
exceeded the previous two-month record of $49.1 billion at the
start of 2006, the research firm said.
Investors worldwide have poured large sums of cash into
stock funds so far this year, showing a renewed appetite for
risk after seeking the safety and stable returns of bonds in
Bond funds worldwide attracted $493.5 billion in new money
last year, whereas investors redeemed $69.09 billion from stock
funds, according to fund-tracking firm EPFR Global.
The record two-month inflow into global equity funds at the
start of this year began with a record monthly inflow of $34.4
billion in January, TrimTabs said. Demand fell somewhat in
February, but remained high with inflows of $20.7 billion, the
Global equity funds hold stocks of companies based around
the world, including those in the U.S. Demand for global stock
funds modestly exceeded inflows into global bond funds, which
took in $50.7 billion in the first two months of 2013, according
Global equity funds also attracted more new cash than funds
that hold only U.S. stocks, which took in $37.9 billion over
January and February, the report added.
The greater demand for global stocks came despite the
outperformance of U.S. stocks compared to world stocks. The
benchmark S&P 500 rose 6.2 percent through February,
whereas the MSCI all-country world equity index
rose 4.32 percent.
Funds that hold U.S. stocks also delivered stronger returns
than funds that hold global stocks. U.S.-focused stock funds
earned an average 6.2 percent through February, TrimTabs said.
That bested the average performance of 2.4 percent from global
equity funds, the report added.
"The U.S. economy, for the typical household, is not very
good," said David Santschi, chief executive officer of TrimTabs.
He cited pressure on consumers stemming from higher taxes and
"They see the growth prospects being better overseas,"
Santschi added with regard to stock markets outside of the U.S.
The big inflows at the start of this year could, however, be
a warning to investors that demand has reached its peak,
"When fund flows become extreme, it suggests that the market
is topping," he said.