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Investors Step Up Fund Purchases

Stock funds take in $4.2 billion of new money in the week ended Wednesday

Investors stepped up their purchase of equity funds over the past week, apparently feeling a little more confident about the economy.

Stock funds pulled in a net $4.2 billion over the five business days ended Wednesday, according to TrimTabs Investment Research of Santa Rosa, Calif. That's nearly twice as much as the $2.6 billion they took in the previous week.

Funds that invest primarily in non-U.S. stocks attracted the most new money, with investors adding a net $3.5 billion, down from the previous week's inflow of $4.03 billion. Investors also added a net $732 million to funds that invest primarily in U.S. stocks, partially reversing the $1.4 billion outflow they took out the previous week.

"The market is rebounding," said Charles Biderman, CEO of TrimbTabs. "There's a lot better tenor to the economy since the Fed stepped in. We still see outflows, but there are more up days."


Dow Jones Industrial Average

closed the week at 13,305.47, up from 13,238.73 a week earlier.

Investors also continued to add to their holdings of bond flows, which took in a net $3.4 billion, up from $2.3 billion a week earlier. Hybrid funds, which invest in both stocks and bonds, also gained popularity, taking in $1.02 billion, up from the previous week's inflows of $900 million.

Exchange-traded funds that invest in U.S. stocks continued to see money walk out the door, albiet at a slower pace. Investors took out $4.2 billion, less than half the previous week's $8.5 billion of outflows.

ETFs that invest in non-U.S. stocks took in $426 million, up slightly from $419 million the previous week.