NEW YORK (Reuters) - Investors piled $8.2 billion into stock exchange-traded funds over the week ended Oct 28, the third week of inflows for those funds and the most new money since mid-September, Lipper data showed on Thursday.
The inflows followed a week dominated by central bank policymakers. The Federal Reserve on Wednesday confirmed the market’s expectations that it would keep the interest rates it controls near zero but made clear that a December rate hike remained possible.
That Fed’s statement followed a rate cut by the Chinese central bank and the possibility that European policymakers will consider stepping up stimulus efforts.
“It was a good week for the markets,” said Pat Keon, a research analyst at Lipper. “There was a lot of positive news in the equity markets.”
Investors in ETFs are often thought to represent the institutional investor, including hedge funds. Mutual funds are thought to represent retail investors.
But not all investors were ready to step up risk-taking. The swift movement by U.S.-based ETF buyers into funds such as the SPDR S&P 500 ETF and the PowerShares QQQ Trust came as investors also pumped $15.7 billion of new cash into money market funds, which are seen as low risk. Those funds had lost $2.7 billion to investor withdrawals the week before, according to Lipper data.
Meanwhile, stock mutual funds, which are used extensively by retail investors, posted just $221 million in inflows, Lipper said.
Across mutual funds and ETFs, nearly 80 percent of the new money in stocks went into funds focused on U.S. domestic markets.
Taxable bond funds, meanwhile, took in a net $432 million, led by strong flows into high-yield bond funds, which took in $2 billion, their fourth straight week of inflows. Those so-called junk bonds are seen as moving in tandem with stocks.
By contrast, risk-haven U.S. Treasury funds posted $1.6 billion in outflows over the period.
The weekly Lipper fund flow data is compiled from reports issued by U.S.-domiciled mutual funds and exchange-traded funds.
Reporting by Trevor Hunnicutt; Editing by Jennifer Ablan and David Gregorio