NEW YORK, March 15 Investors worldwide poured $10.87 billion into funds that hold U.S. stocks in the latest week, with nearly all of the cash flowing into exchange-traded funds as the Dow Jones industrial average extended its record-breaking rally, data from EPFR Global showed on Friday.
The flows into funds that hold U.S. stocks in the week ended March 13 dominated total inflows of $14.1 billion into all equity funds, the Cambridge, Massachusetts-based fund-tracking firm said. The inflows into U.S. stock funds are the most in six weeks.
The high demand showed that investors made opportunistic bets on U.S. stock indexes as the Dow continued to mark record closing highs every day of the reporting period, after first breaking through the prior record on March 5.
"This latest rally has become a big momentum story," said Rick Meckler, president of investment firm LibertyView Capital Management. "It has really begun to pull in a lot of investors who are afraid they'll miss the next move up."
The Dow's nine-day winning streak through March 13 marked the longest consecutive run since November 1996. The benchmark S&P 500 was about 1 percent away from an all-time intraday high on March 13.
The Dow was up 1.1 percent over the reporting period, while the S&P 500 was up 0.85 percent.
Signs of strength in the U.S. economy, including growth in the labor market and a fall in the jobless rate to a four-year low of 7.7 percent, and the Federal Reserve's easy monetary policy have advanced the rally in stocks.
Global equity funds, which hold a diverse portfolio of world stocks, attracted $2.2 billion in new cash over the reporting period. The funds have yet to redeem money to investors on a weekly basis this year, EPFR Global said.
Funds that hold Japanese stocks also won fans with inflows of $1.95 billion. Emerging market stock funds, however, saw outflows of $585 million, after modest inflows of $102 million the prior week.
The MSCI world equity index was up just 0.34 percent over the reporting period.
U.S. bond funds attracted inflows of $1.69 billion, the least in five weeks. Overall, bond funds worldwide took in $3.03 billion after attracting $4.5 billion the prior week.
High-yield "junk" bond funds gained $1.22 billion from investors globally, a fourth straight week of inflows. That was down from inflows of $1.9 billion the previous week.
"High-yield is a risk-on trade," said Jim Awad, managing director at Zephyr Management in New York. "I would expect high-yield bonds and stocks to act very similarly to each other."
Emerging market bond funds attracted $557 million in new money, up modestly from the prior week's inflows of $409 million.
The benchmark 10-year Treasury was down in price to yield 2.06 percent toward the middle of the week. On Friday, the price of the 10-year rose slightly to yield 2 percent following declines in bank shares (nL1N0C76MD).
Money market funds, which are low-risk vehicles that invest in short-term securities, suffered outflows of $7.1 billion over the weekly period.
"There is some rotation out of money market funds and into risk assets such as high-yield and common stocks," Awad of Zephyr Management said.