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While the inflows marked the tenth straight week
of net positive demand, they were the smallest inflows over
those ten weeks, according to ICI, a U.S. mutual fund trade
organization. They were down from inflows of $1.3 billion the
prior week.
Funds that specialize in U.S. stocks posted $1.8 billion in
outflows after attracting a meager $12 million the previous
week. Funds that specialize in international stocks attracted
$3.7 billion, down modestly from the prior week's inflows, which
were the biggest since January 2014.
Markets widely viewed the Fed's statement, released March 18, as
dovish since it showed the central bank had downgraded its
inflation and economic growth projections.
Mutual fund investors likely focused on the Fed's removal of a
reference to being "patient" on rates from its policy statement,
however, said Todd Rosenbluth, director of mutual fund research
at S&P Capital IQ.
Since mutual fund investors take a longer-term horizon, they
likely viewed the removal of the term as confirmation that the
Fed is moving closer to hiking rates, he said.
Rosenbluth also said stronger economic data out of Europe and a
weaker euro are continuing to boost demand for stocks outside of
the United States, hence the hefty inflows into funds that focus
on non-U.S. stocks.
"Investors are increasingly optimistic that international
markets will perform better than they did in the past," he said.
Hybrid funds, which can invest in stocks and fixed income
securities, attracted $913 million to mark their tenth straight
week of inflows.
(Reporting by Sam Forgione; Editing by Nick Zieminski)
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