U.S. stock funds attract most cash since 2014: Lipper
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[December 29, 2017]
By Trevor Hunnicutt
NEW YORK (Reuters) - Investors poured $24.1
billion into U.S.-based stock funds in the week to Dec. 27, Lipper said
on Thursday, sending a gift to equity markets already on pace to record
a year of double-digit percentage gains.
This marks the largest week of inflows for mutual funds and
exchange-traded funds (ETFs) collectively since December 2014, according
to the Thomson Reuters research service, and comes after U.S. lawmakers
finalized a massive corporate tax cut that markets admired.
Cash is also shuffling around during a typically active period for
funds, despite holidays, as investors plan for taxes and report
end-of-year performance statistics. Equity fund outflows totaled $22.2
billion the week prior.
The flow result counters the dominant trend in U.S.-based funds this
year - a reticence to buy stocks at home despite an S&P 500 index poised
to deliver a 2017 return of more than 20 percent.
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Domestic stock funds posted an estimated $23.4 billion in outflows for
the year, according to Lipper, compared to $165 billion inflows for
their counterparts invested abroad and $283 billion inflows for funds
for taxable bonds.
"You see people attracted to equities, but they're not backing up the
truck to buy equities at 20-times earnings," said David Lafferty, chief
market strategist at Natixis Investment Managers, referring to the
seemingly rich price-to-earnings ratio of the S&P 500. "I don't see any
euphoria."
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![](../images/122917pics/busine14.jpg)
Traders work on the floor at the New York Stock Exchange (NYSE) in
Manhattan, New York, U.S., December 28, 2017. REUTERS/Andrew Kelly
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This week, though, domestic equity funds pulled in nearly $18 billion, compared
to $6.4 billion to their internationally oriented peers, according to Lipper.
Healthcare stock funds, however, posted their seventh straight week of outflows.
The U.S. tax bill repealed a requirement that most Americans have insurance or
face penalties.
Taxable bond funds were hit with a rare week of withdrawals. High-yield bonds,
invested in more speculative corporate debt, recorded $240 million in outflows
during the week, Lipper said, while lower-risk Treasury funds pulled in $567
million. Money-market funds, where investors park cash, took in $19.3 billion.
Funds based in the United States but focused on Chinese stocks took in $408
million during the week, the largest inflows since June 2015, during a week in
which strong demand for copper seemed to presage growth in the emerging market
and around the world. [MKTS/GLOB]
(Reporting by Trevor Hunnicutt; Editing by Richard Chang and James Dalgleish)
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