In the shaky U.S. economy, two research firms have found that investors are increasingly turning to exchange traded funds (ETFs) that focus on global markets.
Fund tracker TrimTabs Investment Research reported that total inflows into equity mutual funds the week ending March 26 was $7.43 billion. Of that total, 60% was primarily invested in non-U.S. stocks. According to Paul R. La Monica for CNN Money, the data also revealed that investors took $6.9 billion from ETFs that invest in U.S. stocks and moved $831 million into ETFs with stocks from outside the country.
The Investment Company Institute (ICI) also found that of the $9.5 billion in stock funds last month, $5.89 billion went into funds that invest in international stocks.
Investors aren’t running screaming from the United States, but the numbers show that their confidence is flagging, even when they choose to stay here. Inflows into bond funds last month totaled $14.9 billion. In January, inflows were $24.3 billion. Money market funds took in even more: $92.2 billion last month, and $160.42 billion in January.
La Monica says that this could be a good sign for the domestic markets when the economy turns itself around: the money in these stable investments could be quickly rotated back into domestic stocks and ETFs.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.