U.S. fund investors snap up international stocks: Lipper

By Trevor Hunnicutt

NEW YORK (Reuters) – U.S. investors favored international stock markets, pushing $4.1 billion into equity funds focused abroad during the most recent week, dodging risks at home, Lipper data showed on Thursday.

Domestic stocks funds took in just $631 million during the week ended November 8, Lipper said. The data covers mutual funds and exchange-traded funds (ETFs) based in the United States.

The small haul for domestic stocks comes as investors question whether competing Republican proposals to change the U.S. tax code will be merged into a plan that can gain congressional approval this year.

A corporate tax cut would boost profits, but Senate Republicans are unveiling a proposal that differs markedly from legislation detailed by their counterparts in the House of Representatives.

Non-domestic funds have pulled in $149 billion this year, compared to their domestic counterparts, which have recorded outflows of $13 billion.

Cameron Brandt, director of research at EPFR Global, said the record-setting inflows into global-focused funds are less an endorsement of risk-taking than a demonstration of the “anxiety” investors have about U.S. markets.

“It’s a sign that they are uncertain about the near-term economic outlook,” he said.

The flows may also constitute an endorsement of faster-growing developed markets abroad.

U.S.-based stock funds that invest in Japan took in $758 million, the most since March 2015. European stock fund inflows of $317 million were the biggest since July.

“The market is doing well, the yen is getting weaker and investors are seeing that,” said Tom Roseen, head of research services for Thomson Reuters’ Lipper research unit.

“The pedal is to the metal for a lot of investors.”

In bond land, U.S.-based corporate investment-grade bond funds attracted $1.3 billion over the weekly period, the sector’s 8th straight week of inflows, Lipper said.

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