April 12, 2018 / 10:00 PM / 7 months ago

U.S. fund investors up stock exposure; first time in four weeks: Lipper

NEW YORK (Reuters) - U.S. fund investors plowed back into the markets during the most recent week, with stocks and high-yield bonds attracting cash for the first time in four weeks, Lipper data showed on Thursday.

Taken together, high-yield “junk” bond mutual funds and exchange-traded funds (ETFs) netted $989 million during the week ended April 11, the most since January, according to the research unit.

Meanwhile, U.S. based equity funds took in $5.7 billion.

Both stocks and high-yield bonds are seen as speculative assets, and investors interest in them is taken as an indication of risk appetite.

“It’s cautiously optimistic,” said Tom Roseen, head of research services for Thomson Reuters’ Lipper.

Markets continue to be on edge over U.S.-China trade conflict, the potential for aggressive central bank policy to head off inflation, United States involvement in Syria and other issues.

Funds invested in safe-haven precious metals, including gold, pulled in $594 million during the week, marking a second straight week of inflows and reflecting continued concern.

Yet corporate profits look to be strong. Companies are just starting to roll out their results from the first months of the year, with Delta Air Lines Inc (DAL.N) and BlackRock Inc (BLK.N) beating estimates when they reported on Thursday.

Thomson Reuters I/B/E/S expects S&P 500 .SPX companies' year-over-year earnings for the most recent quarter to rise by 18.4 percent.

“People are encouraged by the fact that most pundits are predicting a pretty solid [first quarter] earnings season,” said Roseen.

U.S. fund investor demand for shares outside their home country has grown more mixed. Emerging markets pulled in $1.2 billion, continuing their unbroken streak of inflows this year. Japanese equities attracted $332 million, their first week of inflows in the past seven weeks.

But investors peeled $751 million out of European stock funds for a sixth straight week of withdrawals as Citigroup Inc’s euro-zone economic surprise index .CESIEUR slumped to its lowest level since 2012.

Reporting by Trevor Hunnicutt

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