U.S. investors continued to buy into the stock market rally by sending a net US$4-billion into domestic equity mutual funds and exchange-traded funds in the week ended Feb. 27th, the largest inflow into the category since the first full week of January, according to data released Wednesday by the Investment Company Institute.
The move into domestic stocks came at the expense of world stock funds, which lost a net US$2.7-billion in outflows, the second straight week that the category lost a billion dollars or more. It was the largest weekly outflow for the category since the week ended Jan. 2.
The benchmark S&P 500 stock index is up about 11 per cent in the year to date after nearly falling into a bear market during the final quarter of 2018, owing in part to hopes for a trade deal between the United States and China and signals that the Federal Reserve will slow its pace of interest rate hikes.
Those gains slightly exceed the 9-per-cent advance in MSCI’s index of world stocks that excludes U.S. shares.
Despite the strong stock market gains, investors also remained bullish on bonds. Fixed-income funds took in a total of US$11.6-billion in net inflows, continuing an eight-week streak of positive inflows that have netted a total of approximately US$76.2-billion into the category.
Over all, the Bloomberg Barclays U.S. Aggregate Bond Index has returned slightly more than 1 per cent for the year to date, according to Morningstar data.