U.S.-based stock funds attract most cash in five weeks: ICI

NEW YORK Investors in U.S.-based mutual funds and exchange-traded funds poured $4.7 billion into stock funds in the week ended April 19, marking the biggest inflows in five weeks as investors returned to U.S.-focused share funds, data from the Investment Company Institute showed on Wednesday.

Investors committed $1.3 billion to U.S.-focused stock funds, marking their first inflows in three weeks and their biggest in five as concerns over France’s presidential elections grew.

Funds that specialize in international shares attracted $3.5 billion. While those inflows more than doubled those into their U.S.-focused counterparts and extended a streak of inflows that began in early December, they marked the weakest demand for international-focused stock funds in three weeks.

Bond funds attracted $3.2 billion, marking their lowest inflows in five weeks but continuing a run of inflows that began in late December.

Investors likely returned to funds that hold U.S. shares on worries over French politics, said Alan Gayle, director of asset allocation at RidgeWorth Investments in Atlanta.

Centrist Emmanuel Macron’s victory against anti-euro nationalist Marine Le Pen in the first round of France’s presidential elections on April 23 sent stocks on both sides of the Atlantic rallying, but worries had mounted ahead of the vote about a potential victory for anti-EU candidates Marine Le Pen and Jean-Luc Melenchon.

“(The United States’) relative issues are smaller than those basic questions facing France, so I think there is a bias toward moving back toward a relative safe-haven, and that has always been the United States,” Gayle of RidgeWorth said about the inflows into U.S.-focused share funds.

Despite the political risk, European stock valuations were still relatively attractive compared to those in the United States, hence the steady inflows into international-focused share funds, he said.

(Reporting by Sam Forgione- Editing by Nick Zieminski)