US Equity Funds Draw Big Inflows
(NEW YORK CITY) Investors pumped $1.49 billion into U.S.-based equity mutual funds in the latest week, the most since early February, data from EPFR Global showed on Friday, Reuters reported.
At the same time, the flow of new money into U.S. bond funds slowed from prior weeks, an indication that the appetite for risk rose even in advance of Sunday’s pivotal Greek election.
U.S. equity funds overall had inflows of $8.12 billion in the week ended June 13. EPFR said much of that new money came from institutional investors buying up shares of two exchange-traded funds that track the performance of large cap stocks.
Globally, equity funds attracted $10.91 billion.
U.S. bond funds still attracted $2.01 billion in inflows, down from inflows in the previous week of $4.2 billion.
The Standard & Poor’s 500 index fell 0.02 percent over the period recorded by EPFR, which was marked by intense interest in the upcoming Greek election, seen as a critical factor in whether Greece remains in the euro zone.
“You start to hit support levels which I would hope would show that there’s real value in quality company equities at this point,” said Paul La Fleche, senior vice president of investments at property insurance firm FM Global, in reference to the inflows into equity funds.
Globally, bond funds attracted $1.46 billion, including outflows from European bond funds of $1.06 billion.
High-yield “junk” bond funds took in $391 million, reversing the previous week’s outflows of $3.6 billion, showing a similar risk appetite that drove new money into equity funds.
Emerging market bond funds had inflows of $361 million, reversing the previous week’s outflows of $563.8 million, while emerging market equity funds had inflows of $919 million, ending five straight weeks of outflows.
“What we’re seeing I think in emerging markets is opportunistic buying or contrarian buying,” said Tim Ghriskey, chief investment officer of Solaris Asset Management.
“Most investors see the emerging markets as an opportunity,” Ghriskey said, noting that the “yields are better” on emerging market bonds than on U.S. Treasuries.
Gold and precious metals funds attracted $747 million in inflows, showing an ongoing preference for the commodity and its safe-haven status.
Chinese equity-specific funds had outflows of $404 million, a 25-week high according to EPFR Global, as the country’s slowing economic growth remains a concern for investors.