U.S.-based stock funds get most cash in over two years: ICI

NEW YORK (Reuters) - Investors in U.S.-based mutual funds poured $8.1 billion into stock funds in the latest week, marking the biggest inflows since Nov. 2013 on views that recent weakness has made U.S. shares more attractive and overseas stocks remained promising.

Investors committed $2.3 billion to funds that specialize in U.S. shares in the week ended Feb. 3, marking the biggest inflows in a year and the first new demand for the funds since late September, according to the data released Wednesday from the Investment Company Institute (ICI).

Most of the inflows into U.S.-focused stock funds went toward funds that hold large-cap shares, at $1.8 billion, the data from ICI, a U.S. mutual fund trade organization, showed.

Inflows into funds that specialize in international shares were more than double those going into U.S.-focused stock funds, however, at $5.7 billion. Those inflows marked the biggest since last April and the funds' fifth straight week of new demand.

Funds that specialize in overseas developed markets attracted most of the inflows into international-focused stock funds, at $5 billion, their biggest inflows since at least the start of last year. Emerging market stock funds attracted just $744 million.

"There are a lot of bargains, in particular in Japan and Europe," said Tom Siomades, head of Hartford Funds Investment Consulting Group in Radnor, Pennsylvania, in reference to the appeal for shares in developed markets overseas.

Bond funds posted $4.3 billion in outflows, marking their 13th straight week of withdrawals. Outflows of $4.2 billion from investment-grade bond funds, their biggest since late August, accounted for most of the total.

Funds that hold government bonds attracted $1 billion to mark their eighth straight week of inflows.

Siomades said weakness in U.S. shares may have led investors to jump into U.S.-focused share funds on the view that they had become more attractive at lower prices, while concerns over potential Federal Reserve rate increases this year may have driven investors out of investment-grade bond funds.

The following table shows estimated ICI flows for the past five weeks (all figures in millions of dollars):

  2/3 1/27 1/20 1/13 1/6/2016

Total equity 8,057 -4,920 -3,788 -1,554 -2,379

Domestic 2,313 -6,263 -4,903 -4,756 -3,938  

World 5,744 1,344 1,115 3,202 1,559  

Hybrid 1,706 -3,468 -2,659 -3,561 -2,187

Total bond -4,289 -904 -1,937 -534 -100

Taxable -5,490 -1,756 -2,934 -1,853 -1,435  

  Municipal 1,200 853 997 1,319 1,335  

Total 5,474 -9,291 -8,384 -5,650 -4,666

(Reporting by Sam Forgione; Editing by Nick Zieminski)