March 7, 2018 / 6:28 PM / 5 months ago

U.S. domestic stock funds net cash for 1st time in 4 weeks -ICI

    By Trevor Hunnicutt
    NEW YORK, March 7 (Reuters) - U.S. fund investors are
warming to the stock market again.
    Domestic equity funds took in cash for the first time in
four weeks, according to the Investment Company Institute (ICI),
as caution toward the markets has once again given way to risk
taking.
    Some $6.4 billion surged into the domestic-stock investment
products in the week ended Feb. 28, according to the trade group
for mutual funds and exchange-traded funds (ETFs). Overall,
equity funds took in $11.7 billion, helped by a 65th straight
week of net inflows for funds focused abroad.
    U.S. fund investors wary of rising interest rates and
inflation had avoided stocks in their home market during
previous weeks.
    Those concerns have since ebbed and been replaced by the
bogeyman of the United States imposing hefty steel and aluminum
tariffs and touching off a global trade war.
    That and the withdrawal of monetary policy stimulus are
reasons to be cautious around U.S. stocks, which, according to
Astoria Portfolio Advisors LLC founder John Davi, remain
expensive relative to alternatives.
    "Why do you want to own U.S. equities when emerging markets
are so much cheaper, Japan is so much cheaper," said Davi.
    "Bonds are incredibly expensive and crowded. Commodities are
the cheapest asset class out there."
    Debt funds grabbed $5.2 billion, the most in three weeks,
while commodity funds such as those invested in gold pulled in
$278 million, according to ICI.
    The following table shows estimated ICI flows for mutual
funds and ETFs (all figures in million of dollars):
               2/28    2/21    2/14       2/7      1/31/2018
 Equity        11,703  2,505   1,523      -33,974  12,483
    Domestic   6,397   -4,899  -7,556     -37,002  4,552
    World      5,306   7,405   9,079      3,028    7,931
 Hybrid        -422    -965    -1,456     -1,393   -183
 Bond          5,190   4,451   -12,114    7,303    8,854
    Taxable    5,077   3,970   -11,474    7,891    7,009
    Municipal  112     481     -640       -588     1,844
 Commodity     278     477     182        939      386
 Total         16,748  6,469   -11,864    -27,125  21,540
 
 (Reporting by Trevor Hunnicutt)
  
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