May 16, 2018 / 9:40 PM / 9 months ago

U.S. fund investors push into stocks for 1st time in 4 weeks -ICI

    By Trevor Hunnicutt
    NEW YORK, May 16 (Reuters) - U.S. fund investors edged into
stocks for the first time in four weeks, treating concern over
the Iranian nuclear deal and Chinese-U.S. trade tensions as a
buying opportunity, Investment Company Institute (ICI) data
showed on Wednesday.
    Stock funds took in $2 billion during the week ended May 9,
according to the trade group's data, which covers mutual funds
and exchange-traded funds (ETFs) based in the United States.
    During that week, investors grappled U.S. President Donald
Trump pulling out of an international nuclear deal with Iran,
raising the risk of conflict in the Middle East and casting
uncertainty over global oil supplies.
    Meanwhile, China and the United States remained at odds over
key aspects of their trade dispute. Talks between the countries
are resuming this week.
    "This is becoming a very complicated market environment,"
said Kristina Hooper, global market strategist at Invesco Ltd
    "We have all these geopolitical risks, and the geopolitical
landscape continues to change almost daily."
    Hooper said volatility is likely to persist through 2018 not
merely because of the international political environment but
also because of lingering questions about how the Federal
Reserve will respond to inflation and whether rising U.S.
interest rates force investors to pull back from stocks.
    Bond prices have been under pressure in recent weeks, with
yields on benchmark 10-year U.S. Treasuries smashing
through 3 percent this week.
    Rising rates erode the value of bonds, but investors
continue to flock to them for the promise of higher payouts now
that yields are higher and to counteract the risk that stocks
    Bond funds attracted $2.7 billion in the most recent week,
according to the data.
    The following table shows estimated ICI flows for mutual
funds and ETFs (all figures in million of dollars):
               5/9     5/2     4/25    4/18    4/11/2018
 Equity        2,030   -2,457  -879    -251    5,213
    Domestic   1,302   -2,992  -3,777  -2,377  3,775
    World      728     535     2,898   2,126   1,437
 Hybrid        -788    -887    -633    -1,090  -1,101
 Bond          2,735   3,472   2,264   8,492   6,470
    Taxable    2,383   3,635   2,360   9,321   7,166
    Municipal  352     -163    -96     -830    -696
 Commodity     242     -82     508     167     1,121
 Total         4,219   45      1,259   7,317   11,703
 (Reporting by Trevor Hunnicutt
Editing by James Dalgleish)
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