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 The massive cash commitments for the week ended Dec. 24 were the
biggest since Lipper's records began in 1992. Investors pledged
entirely to funds that specialize in U.S. stocks, which attracted
$39 billion, while funds that invest in non-U.S. shares posted $2.5
billion in outflows.
The demand came from both retail and institutional investors, with
stock mutual funds attracting $12.8 billion and stock
exchange-traded funds attracting $23.7 billion. Mutual funds are
commonly purchased by retail investors, while ETFs are thought to
represent the behavior of institutional investors.
The inflows into stock mutual funds were the biggest since March
2000, while the inflows into stock ETFs were the biggest since March
2008. The overall inflows into stock funds follows $17.9 billion in
withdrawals the prior week, which were the biggest since February.
Funds that specialize in energy stocks attracted $1.5 billion, their
biggest inflows since September 2008, while funds that specialize in
Japanese stocks posted $1.5 billion in outflows, their biggest on
record.
Taxable bond funds attracted $6.1 billion, their biggest inflows in
seven weeks but just a fraction of the inflows into riskier stock
funds. Funds that hold investment-grade corporate bonds attracted
$2.6 billion after posting $80 million in outflows the prior week,
which marked their first outflows since June.
Funds that specialize in emerging market shares posted $990 million
in outflows, their biggest withdrawals in 10 weeks. Low-risk money
market funds, meanwhile, attracted $17 billion, their biggest
inflows in three weeks.
The inflows into stock funds came as the benchmark S&P 500 stock
index rallied 3.4 percent and hit record closing highs on an
unexpectedly strong report on U.S. economic growth and on the back
of reassuring comments by the Federal Reserve on monetary policy.
Year-end buying also boosted U.S. shares.
The Dow hit record closing highs and ended above 18,000 for the
first time over the period.
The Commerce Department's 5 percent final estimate of U.S.
third-quarter economic growth, released Dec. 23, indicated the
quickest pace in over a decade.
"That took a lot of people by surprise, and translating that through
the markets, it ought to make you a lot more positive on the equity
side," said Jack Rivkin, chief investment officer at Altegris in La
Jolla, California.
He also said investors have favored stocks heading into the
year-end, given the recent upward momentum in U.S. shares.
"You want that portfolio at the end of the year to look like you
knew what you were doing for the whole quarter, and that’s pushing
more money into stocks." The S&P 500, which has risen about 13
percent this year, has risen about 6 percent in the fourth quarter.
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The inflows into energy stock funds came as brent oil prices
rebounded 5 percent on Dec. 19 in a recovery from near a 5-1/2-year
low as investors squared books ahead of the end of the year,
following a six-month slide.
The record outflows from Japanese stock funds, meanwhile, came
despite Japan's recommitment to its massive economic stimulus
campaign pushed Asian stocks to their best day in 15 months.
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 % Assets Assets ($Bil) Count
($Bil)
All Equity Funds 36.485 0.74 5,108.977 11,289
Domestic Equities 39.001 1.09 3,733.235 8,135
Non-Domestic -2.516 -0.19 1,375.742 3,154
Equities
All Taxable Bond 6.085 0.27 2,248.046 5,871
Funds
All Money Market 16.997 0.71 2,402.032 1,276
Funds
All Municipal 0.659 0.19 337.938 1,469
Bond Funds
(Reporting by Sam Forgione; Editing by James Dalgleish, Leslie Adler
and Ken Wills)
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