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FUND FLOWS: Unfazed by Rate Hike, Investors Piled a Record $34 Billion into U.S. Equity Funds Last Week

They also yanked $40 billion out of U.S. money market funds.

U.S. Equity Funds enjoyed a record-breaking surge of fresh money during the second week of March, as investors shrugged off an impending U.S. rate hike and the internal struggles of Trump’s administration and chased a rally that saw the benchmark Dow Jones Industrial Average Index climb more than 400 points in a day.

The over $34 billion committed to U.S. Equity Funds came during a week when investors moved over $40 billion out of U.S. Money Market Funds. Overall, EPFR-tracked Equity Funds pulled in a collective $43.3 billion—also a new weekly record—during the seven days ending March 14, while Bond Funds absorbed $2.3 billion and Alternative Funds $318 million. Overall redemptions from Money Market Funds totaled $35.6 billion. 


The U.S. rate hike that the market is 100 percent certain will be delivered this week did not stop Dividend Equity Funds from recording their biggest inflow since the record setting $9.4 billion they took in exactly three years ago, with investors translating recent earnings per share growth and expected repatriation of foreign cash piles into bigger dividend payouts. But Emerging Markets Bond Funds posted outflows for only the fifth time since the beginning of 2017 ahead of the FOMC’s March meeting.

Elsewhere, at the single country and asset class fund levels, High Yield Bond Funds recorded their ninth consecutive outflow while Inflation Protected Bond Funds took in fresh money for the 10th time in the 11 weeks, year-to-date. South Africa and Brazil Equity Funds extended their current inflow streaks to five and six straight weeks, respectively, redemptions from Korea Equity Funds hit an 18-week high and investors pulled money out of Italy Equity Funds for the 13th time in the past 14 weeks.

Cameron Brandt is Director of Research for EPFR Global, an Informa Financial Intelligence company.

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