September 26, 2018 / 5:16 PM / 25 days ago

U.S. stock funds attract most cash since March -ICI

    NEW YORK, Sept 25 (Reuters) - U.S. fund investors scrambled
back into domestic stocks during the latest week, handing over
the most cash to access that market since March, Investment
Company Institute (ICI) data showed on Wednesday.
    Domestic stock funds took in $10.5 billion during the week
ended Sept. 19, the largest haul since March, the trade group
said.
    During the latest reporting week, tit-for-tat tariffs
between the United States and China were viewed by investors as
less damaging than expected. The Trump administration selected a
lower-than-expected 10 percent tariff and excluded Apple Inc
 from the list of new levies.
    China's retaliation, meanwhile, only included $60 billion
worth of U.S. goods and reduced the level of tariffs it would
collect, convincing some that Beijing was running out of options
to hit back.
    The activity within funds appeared to reveal a pent-up
demand for risk-taking in U.S. markets, which have been clouded
by mixed performance even as corporate profits hit record
levels. Analysts expect S&P 500 earnings to rise nearly
23 percent in 2018, according to Thomson Reuters I/B/E/S, while
the index itself is up 9 percent year-to-date.
    Equity exchange-traded funds (ETFs) took in $12.7 billion
during the latest week, offset only slightly by stock mutual
funds' $2.5 billion in withdrawals, ICI said. ETFs are heavily
trafficked by quick-trading investors while mutual funds are
more exclusively used by long-term retail investors.
    U.S. investors' demand for stocks abroad, meanwhile,
continues to wane, a casualty of the trade conflict and concerns
about economic growth. Over the past 10 weeks, world stock funds
have averaged just $474 million in cash deposits, compared to
$3.1 billion on average before that this year, ICI data shows.
Withdrawals were $351 million in the latest week.
    Bond funds remained popular, attracting $4.3 billion during
the week as money chases yields plumped up by U.S. Federal
Reserve rate hikes. Debt funds have not posted a single week of
net withdrawals since February, according to ICI.
    The following table shows estimated ICI flows for mutual
funds and ETFs (all figures in millions of dollars):
                 9/19    9/12     9/5    8/29    8/22
 Equity        10,194  -3,371  -5,551    -570   3,028
    Domestic   10,545  -3,830  -7,011    -413   1,415
    World        -351     459   1,461    -158   1,613
 Hybrid        -1,094  -1,691  -1,762  -1,362  -1,485
 Bond           4,339   7,206   3,519   4,414   4,597
    Taxable     4,223   7,177   3,515   4,141   4,066
    Municipal     116      30       4     273     531
 Commodity       -104     -57    -411    -388    -532
 Total         13,335   2,088  -4,204   2,094   5,607
 
 (Reporting by Trevor Hunnicutt; Editing by David Gregorio)
  
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