After the Fed reassured markets that accommodative measures will remain in place for the time being, investors jumped back into U.S. equities and stock exchange traded funds with a vengeance.
Over the past week, about $19.7 billion was funneled into global equity funds, the most in six months, and $17.5 billion went into U.S. equity funds, the most since June 2008, reports Michael Stothard for the Financial Times. Meanwhile, $700 million was pulled from bond funds.
In the first 12 days of July, U.S. stock ETFs attracted $24.4 billion in assets. [Investors Pumping $2 Billion a Day Into U.S. Stock ETFs in July]
“We have really seen confidence returning among personal investors,” Michael Turner, head of global strategy and fund manager at Aberdeen Asset Management, said in the article. “Stronger economic data and softer words by the Fed have boosted confidence.”
The markets roiled in June on growing fears about Fed’s plans to taper its quantitative easing plan, which would push interest rates higher and destabilize the U.S. recovery. However, the markets turned around after the Fed assuaged market fears, along with a string of healthy earnings reports.