U.S. investors continued to buy into the stock market rally by sending a net $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 $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 nearly 11.3 percent in the year to date after nearly falling into a bear market during the final quarter of 2018, thanks in part to hopes for a trade deal between the U.S. and China and signals that the Federal Reserve will slow its pace of interest rate hikes.Those gains slightly exceed the 9 percent 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 $11.6 billion in net inflows, continuing an 8-week streak of positive inflows that have netted a total of approximately $76.2 billion into the category. Overall, the Bloomberg Barclays U.S. Aggregate Bond index has returned slightly more than 1 percent for the year to date, according to Morningstar data.
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