Some might argue that record fund inflows corresponding to record market highs is a bad sign for the future of the bull. Time to buy an emerging market ETF?
The Most Hated Rally Ever That Everyone Loves
Courtesy of Joshua M Brown
A gigantic statistic surfaced this weekend about fund flows this past week, which shattered every weekly record on the books:
Investors in U.S.-based funds poured $36.5 billion into stock funds in the latest weekly period, marking the biggest inflows on record as U.S. stocks surged to record highs, data from Thomson Reuters Lipper service showed on Friday.
The massive cash commitments for the week ended Dec. 24 were the biggest since Lipper’s records began in 1992. Investors pledged entirely to funds that specialize in U.S. stocks, which attracted $39 billion, while funds that invest in non-U.S.shares posted $2.5 billion in outflows.
The demand came from both retail and institutional investors, with stock mutual funds attracting $12.8 billion and stock exchange-traded funds attracting $23.7 billion.
I think it’s safe to say:
a) we can drop the whole “Most hated bull market ever” thing.
b) Wow – stock ETFs took in double what stock mutual funds took in. This is advisors and younger investors putting money to work, not just paint-by-numbers 401(k) contribution.
c) the pure hatred of overseas stocks remains apparent in this data. The degree to which people are willing to chase US stocks while forsaking the stocks from around the world is hitting a fever pitch.
Source:
U.S.-based stock funds attract record $36.5 bln inflows in week -Lipper (Reuters)
