July 17, 2019 / 4:27 PM / a month ago

Investors wade back into U.S. stocks as S&P 500 hits records

    By David Randall
    NEW YORK, July 17 (Reuters) - Investors waded back into the
U.S. stock market by buying mutual funds and exchange-traded
funds that hold domestic stocks last week after pulling out the
largest amount of net assets since 2014 the week before,
according to data released on Wednesday by the Investment
Company Institute. 
    Overall, investors sent nearly $2.4 billion into domestic
stock funds last week, breaking a two-week retreat that pulled
more than $30 billion in net assets from the category. The moves
into the market came as the benchmark S&P 500 continued
to touch new highs as part of a rally that has pushed the index
up nearly 20% for the year to date, fueled in part by
expectations of at least one equity-friendly interest rate cut
by the U.S. Federal Reserve by the end of the year. 
    Yet despite that rally, investors have been hesitant to buy
U.S. stock funds. For the year to date, investors have pulled
nearly $59 billion from U.S. stock funds, according to ICI
data. 
    Instead, investors continue to gravitate toward bonds even
as the yield of the 10-year Treasury hovers near 2%. Taxable and
municipal debt funds added another $9.9 billion in new assets
last week, continuing a streak of positive inflows over every
full week of this year that has brought in nearly $234 billion
in net assets into the category over that time. 
    World stocks, meanwhile, continued to seep assets. Investors
pulled slightly more than $1 billion from the category last
week, adding to a seven-week losing streak. For the year to
date, world stock funds have dropped nearly $17.7 billion in net
assets. 
 
    The following is a broad breakdown of the flows for the
week, including mutual funds and exchange-traded funds: 
                    7/10/19   7/2/19  6/26/19  6/19/19  6/12/19
 Equity               1,373  -28,756   -8,827   10,128    5,043
         Domestic     2,382  -25,153   -5,417   11,676    6,195
         World       -1,009   -3,603   -3,410   -1,548   -1,152
 Hybrid                 -46     -560   -1,947     -156   -1,282
 Bond                 9,858   10,435   10,528    7,932   11,934
         Taxable      7,694    8,810    8,011    6,342   10,653
         Municipal    2,164    1,625    2,517    1,590    1,281
 Commodity              208      143    1,703      389      317
 Total               11,393  -18,737    1,456   18,292   16,012
 
 (Reporting by David Randall; Editing by Jennifer Ablan and
Jonathan Oatis)
  
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