FILE PHOTO: A trader works on the floor of the New York Stock Exchange (NYSE) in New York, U.S., January 8, 2019. REUTERS/Brendan McDermid
NEW YORK (Reuters) – Investors put money to work in both U.S. stock and bond markets for the week ended Wednesday, after soothing remarks by Federal Reserve Chair Jerome Powell that low inflation would allow the U.S. central bank to be “patient” in deciding whether to continue raising rates this year.
U.S.-based stock funds attracted about $8.74 billion in the week ended Jan. 9, following the previous week’s cash withdrawal of $18.7 billion, according to data released Thursday by Lipper. U.S.-based taxable bond funds attracted $8.4 billion in the week ended Wednesday, following the previous week’s cash outflows of over $12.7 billion, according to Refinitiv’s Lipper research service.
“It appeared to be ‘risk-on’ for the week,” said Tom Roseen, head of research services for Lipper. He noted that it was the first week in 29 that equity mutual funds – excluding exchange-traded funds (ETFs) – witnessed net inflows of over $4.4 billion. That marked their largest weekly net inflows since June 20, 2018, he said.
But Roseen said it was the seventh consecutive week that taxable bond funds, excluding ETFs, witnessed net outflows, handing back $926 million this past week. Taxable bond ETFs, for their part, attracted roughly $9.35 billion for the same time period, Lipper data show.
“Domestic equity funds – ex-ETFs – took in a little less than $3.3 billion, witnessing their second weekly net inflows in three while posting a 3.99 percent return on average for the flows week,” Roseen said.
Their non-domestic equity fund counterparts, posting a 4.08 percent return on average, witnessed their first weekly net inflows since Sept. 19, 2018, said Roseen, noting more than $1.1 billion of inflows this past week.
For the 15th week in a row, non-domestic equity ETFs witnessed net inflows, with this past week attracting $3.6 billion, Roseen said. That was their largest weekly net inflows since Jan. 31, 2018, he said.
All told, safer money-market funds attracted over $17 billion in the week ended Wednesday, underscoring investors’ skittishness on financial markets given the recent volatility. It was the sector’s fifth consecutive week of cash inflows, Lipper said.
Reporting by Jennifer Ablan; Editing by Tom Brown and James Dalgleish