NEW YORK (Reuters) - U.S. technology stock funds took in more cash in the week ended Jan. 24 than in any week since the turn-of-the-century bubble, Lipper said on Thursday, offering further evidence that investors’ wariness about markets has given way to exuberance.
Tech mutual funds and exchange-traded funds (ETFs) based in the United States gulped down $1.7 billion during the week, more than in any week measured by Lipper since March 2000.
Overall, U.S.-based stock funds took in $23.4 billion, the most in four weeks, the research service’s data showed. In a break with recent patterns, much of the money went to domestic stocks.
“Investors are still positive about the U.S.,” said Pat Keon, senior research analyst for Thomson Reuters’ Lipper unit.
“The whole market’s in a bubble,” he said.
Keon added that the U.S. stock market’s current run-up was built on a firmer foundation of earnings growth than was the case two decades ago, however.
At that time, investors pumped up the valuations of fly-by-night internet companies until the bubble burst, and the tech-heavy Nasdaq Composite index collapsed nearly 80 percent between its March 2000 peak and October 2002 low.
“Back then they were throwing money at companies that weren’t making profits, they didn’t have business plans,” said Keon.
Today, the tech leaders are mostly profitable, and are building advantages that challenge incumbents in other industries.
“They have such a monopoly on data,” said Paul Kim, managing director of ETF strategy at Principal Global Investors.
“Data is really the currency of the future.”
Tech funds with the highest inflows during the week included VanEck Vectors Semiconductor ETF, Global X Robotics & Artificial Intelligence ETF and Amplify Transformational Data Sharing ETF, which focuses on blockchain, the decentralized ledger technology behind bitcoin.
Investors are also warming to gold as the dollar cools.
The greenback fell 5 percent since Dec. 20 against major trading partners’ currencies amid global economic growth and the potential for inflation. Investors turn to gold in hopes it will retain its value when the dollar is unstable.
Funds invested in the precious metal took in $1 billion, the largest inflows since July 2016, Lipper said.
U.S. Treasury Secretary Steven Mnuchin on Wednesday said he welcomed a weaker domestic currency, but was contradicted by President Donald Trump the next day.
Reporting by Trevor Hunnicutt; Editing by James Dalgleish and Tom Brown