Investors Return to U.S. Equity Funds

Two surveys show inflows after recent declines.
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U.S. equity funds had net inflows of $2.8 billion in the week ended March 31, with two-thirds of the money going into U.S. stock funds, AMG Data Services reported today.

International equity funds reported inflows of $838 million. Small-cap growth and value funds reported inflows of $1.1 billion, the most since May 1, 2002, while technology funds reported outflows for the ninth consecutive week, AMG said.

U.S. junk bond mutual funds saw outflows of $173 million for the week ended Wednesday, the third week of outflows that began after the bombings in Madrid. The previous week, investors pulled out $208 million from junk bond funds. The magnitude of outflows has decreased since the week after the Madrid bombings, as the equity markets stabilized with investors less worried about geopolitical events.

U.S. municipal bond funds reported $79 million of net cash outflows in the latest week. The latest municipal bond fund flows are a change from the previous week, when tax-exempt funds recorded $68 million of net cash inflows.

Fellow fund-flow tracking firm TrimTabs reported that U.S. equity funds took in $880 million over the last two days after seeing $4.4 billion in outflows the prior five days.

"We turned bullish on Tuesday," said TrimTabs CEO Charles Biderman.

Biderman says April is historically the second biggest month for equity infusions as investors contribute to their IRA's before filing their taxes on April 15.

"We expect hefty inflows the next couple of weeks, especially considering today's jobs number," says Biderman.