Stock funds worldwide have record $26 billion inflow: BofA

Fri Sep 20, 2013 11:03am EDT
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NEW YORK (Reuters) - Investors poured a record $26 billion into stock funds worldwide in the week ended September 18 as global markets rallied on expectations that the U.S. Federal Reserve would maintain its easy-money policies, data from a Bank of America Merrill Lynch Global Research report showed on Friday.

The inflows into stock funds were the biggest on records dating back to 1992, according to Bank of America Merrill Lynch. U.S. stock exchange-traded funds attracted $16.9 billion of the total inflows, according to the report, which also cited data from fund-tracking firms EPFR Global and Lipper.

U.S. shares surged to record highs on Wednesday, the last day of the reporting period, after the Fed said it would maintain the pace of its $85 billion in monthly bond purchases and await more evidence of solid economic growth.

The Standard & Poor's 500 .SPX stock index and the Dow Jones industrial average .DJI hit record highs on Wednesday. Global equity markets also gained after former U.S. Treasury Secretary Lawrence Summers on Sunday withdrew from consideration to be the next Fed chairman.

A potential Summers nomination was viewed as less favorable for the continuation of stimulus measures that have helped boost the S&P 500 Index more than 20 percent this year.

Yields on benchmark 10-year U.S. Treasury notes fell over the week, and plunged 17 basis points to 2.69 percent following the Fed decision. As yields fall, prices rise.

The MSCI world equity index .MIWD00000PUS rose 1.6 percent over the reporting period, while the S&P 500 index rose 2.2 percent.

European stock funds pulled in $3.1 billion, the largest inflows in more than two years, the report said. The FTSEurofirst 300 .FTEU3 index of top European shares rose 0.9 percent over the week.

Emerging market stock funds had inflows of $1.5 billion, down from inflows of $2.6 billion in the previous week but marking the second straight week of new demand for the funds.   Continued...

The company logo of the Bank of America and Merrill Lynch is displayed at its office in Hong Kong March 8, 2013. REUTERS/Bobby Yip