December 28, 2017 / 11:24 PM / a year ago

UPDATE 1-U.S. stock funds attract most cash since 2014 -Lipper

 (Adds analyst quote, details on funds, table, byline)
    By Trevor Hunnicutt
    NEW YORK, Dec 28 (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.
    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."
    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 The U.S. tax bill repealed a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
    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
    Funds based in the United States but focused on Chinese
stocks took in $408 million during the week, the largest inflows
since June 2015, during a week in which strong demand for copper
seemed to presage growth in the emerging market and around the
    The following is a breakdown of the flows for the week,
including mutual funds and ETFs:
 Sector                    Flow Chg  % Assets  Assets     Count
                           ($blns)             ($blns)    
 All Equity Funds          24.059    0.37      6,489.336  12,135
 Domestic Equities         17.690    0.41      4,365.124  8,657
 Non-Domestic Equities     6.369     0.30      2,124.212  3,478
 All Taxable Bond Funds    -0.342    -0.01     2,620.941  6,047
 All Money Market Funds    19.264    0.72      2,691.238  1,032
 All Municipal Bond Funds  -0.180    -0.05     401.165    1,472
 (Reporting by Trevor Hunnicutt; Editing by Richard Chang and
James Dalgleish)
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