January 26, 2018 / 12:09 AM / 3 months ago

UPDATE 1-U.S. tech stock funds attract most cash since 2000 -Lipper

 (Adds details on funds, analyst quote, table, byline)
    By Trevor Hunnicutt
    NEW YORK, Jan 25 (Reuters) - U.S. technology stock funds
took in more cash in the week ended Jan. 24 than in any week
since the turn-of-the-century bubble, Lipper said on Thursday,
offering further evidence that investors' wariness about markets
has given way to exuberance.
    Tech mutual funds and exchange-traded funds (ETFs) based in
the United States gulped down $1.7 billion during the week, more
than in any week measured by Lipper since March 2000.
    Overall, U.S.-based stock funds took in $23.4 billion, the
most in four weeks, the research service's data showed. In a
break with recent patterns, much of the money went to domestic
stocks.
    "Investors are still positive about the U.S.," said Pat
Keon, senior research analyst for Thomson Reuters' Lipper unit.
    "The whole market's in a bubble," he said.
    Keon added that the U.S. stock market's current run-up was
built on a firmer foundation of earnings growth than was the
case two decades ago, however.
    At that time, investors pumped up the valuations of
fly-by-night internet companies until the bubble burst, and the
tech-heavy Nasdaq Composite index collapsed nearly 80
percent between its March 2000 peak and October 2002 low.
    "Back then they were throwing money at companies that
weren't making profits, they didn't have business plans," said
Keon.
    Today, the tech leaders are mostly profitable, and are
building advantages that challenge incumbents in other
industries.
    "They have such a monopoly on data," said Paul Kim, managing
director of ETF strategy at Principal Global Investors.
    "Data is really the currency of the future."
    Tech funds with the highest inflows during the week included
VanEck Vectors Semiconductor ETF, Global X Robotics &
Artificial Intelligence ETF and Amplify
Transformational Data Sharing ETF, which focuses on
blockchain, the decentralized ledger technology behind bitcoin.
    
    GOLD IN DEMAND
    Investors are also warming to gold as the dollar cools.
    The greenback fell 5 percent since Dec. 20 against
major trading partners' currencies amid global economic growth
and the potential for inflation. Investors turn to gold in hopes
it will retain its value when the dollar is unstable. 
    Funds invested in the precious metal took in $1 billion, the
largest inflows since July 2016, Lipper said.
    U.S. Treasury Secretary Steven Mnuchin on Wednesday said he
welcomed a weaker domestic currency, but was contradicted by
President Donald Trump the next day.
    The following is a breakdown of the flows for the week,
including mutual funds and ETFs:
 Sector                    Flow Chg  % Assets  Assets     Count
                           ($blns)             ($blns)    
 All Equity Funds          23.436    0.33      7,218.469  12,167
 -Domestic Equities        17.256    0.36      4,917.907  8,674
 -Non-Domestic Equities    6.180     0.27      2,300.562  3,493
 All Taxable Bond Funds    5.350     0.20      2,666.456  6,068
 All Money Market Funds    8.227     0.31      2,673.601  1,031
 All Municipal Bond Funds  0.781     0.19      403.598    1,474
 
 (Reporting by Trevor Hunnicutt; Editing by James Dalgleish and
Tom Brown)
  
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