Surge comes as world economic outlook improves and US launches vast stimulus effort
Naomi Rovnick and Adam SamsonInvestors have poured almost $170bn into equity funds over the past month in the latest sign of how the brightening economic outlook and relentless stimulus measures have provided a sustained boost for stocks.
Funds that buy shares recorded $68.3bn in net inflows in the week to last Wednesday, the largest amount on record, according to data compiled by research group EPFR. This brought the total over the past four weeks to $168bn, Goldman Sachs said.
The surge last week, which was the most pronounced in US stocks, came as the US government began distributing the stimulus payments that were part of Joe Biden's $1.9tn relief package.
"These payments may be making their way in to mutual funds and [exchange traded funds] as well as other assets," Goldman Sachs analysts said.
International investors have also bought US stocks, with UK brokerage Hargreaves Lansdown noting last week that it had seen "elevated volumes of share dealing since the end of January with an increased proportion of these directed towards international equities, driven by interest in US stocks from existing clients".
Last week's rush of inflows also came after the Federal Reserve lifted its outlook for the world's biggest economy and said it expected to hold interest rates at historically-low levels until at least 2024.
"We are in [the] midst of [the] strongest macro data of our lives," analysts at BofA wrote, referring to economic indicators that showed the US and China were recovering rapidly from the pandemic.
The brightening outlook lifted the blue-chip S&P 500 to a record high on Wednesday, the day of the rate decision. However, US stocks wobbled later in the week in response to a tumble in the bond market triggered by rising angst that rapid growth will fuel a boom in inflation that potentially calls time early on monetary stimulus measures.
Financial Times
https://www.ft.com/content/88ab1525-02d3-4cf7-83ef-cfc00322d2b3
Funds that buy shares recorded $68.3bn in net inflows in the week to last Wednesday, the largest amount on record, according to data compiled by research group EPFR. This brought the total over the past four weeks to $168bn, Goldman Sachs said.
The surge last week, which was the most pronounced in US stocks, came as the US government began distributing the stimulus payments that were part of Joe Biden's $1.9tn relief package.
"These payments may be making their way in to mutual funds and [exchange traded funds] as well as other assets," Goldman Sachs analysts said.
International investors have also bought US stocks, with UK brokerage Hargreaves Lansdown noting last week that it had seen "elevated volumes of share dealing since the end of January with an increased proportion of these directed towards international equities, driven by interest in US stocks from existing clients".
Last week's rush of inflows also came after the Federal Reserve lifted its outlook for the world's biggest economy and said it expected to hold interest rates at historically-low levels until at least 2024.
"We are in [the] midst of [the] strongest macro data of our lives," analysts at BofA wrote, referring to economic indicators that showed the US and China were recovering rapidly from the pandemic.
The brightening outlook lifted the blue-chip S&P 500 to a record high on Wednesday, the day of the rate decision. However, US stocks wobbled later in the week in response to a tumble in the bond market triggered by rising angst that rapid growth will fuel a boom in inflation that potentially calls time early on monetary stimulus measures.
Financial Times
https://www.ft.com/content/88ab1525-02d3-4cf7-83ef-cfc00322d2b3
