Investors flood U.S. stock funds at fastest pace since 2000 -TrimTabs

Reuters

NEW YORK, Oct 29 (Reuters) - Investors sent $45.5 billioninto U.S.-based equity mutual funds and exchange-tradedfunds from the start of October through Friday, thefifth-highest month on record, data from research providerTrimTabs showed on Tuesday.

Those stock funds, which own shares of companies both insideand outside the United States, have had inflows of $277 billionthis year, the largest annual inflow since 2000. Funds that holdstocks of only U.S companies recorded their first annual inflowsince 2007, the data showed.

Investor appetite for riskier assets has grown this year asthe S&P 500 stock index has risen steadily and hit aseries of record highs in October.

Three of the 10 largest monthly inflows into equity fundshave occurred this year, TrimTabs said in a research note.

"As Silicon Valley bestows multi-billion dollar valuationson technology outfits with neither revenue nor profits,investors are piling into equity funds at the fastest rate sincethe technology stock bubble popped in 2000," David Santschi,chief executive officer of TrimTabs, said in a statement.

Meanwhile, U.S. bond funds continued to experience outflowsfor the fifth consecutive month, with investors pulling $17.8billion so far in October. Those funds have lost $31 billionthis year, the largest outflow since 2000, when investorsredeemed $50 billion.

"These outflows mark a huge shift for the fixed-incomeworld," said Santschi. "Not since late 2003 have bond fundsposted five monthly outflows in a row."

The anticipation of a pullback in the Federal Reserve's $85billion monthly bond purchases has spurred investors to sellbonds in recent months.

However, The Federal Open Market Committee, the U.S centralbank's policy-setting group, has been widely expected to signalon Wednesday the Fed will continue its stimulus.

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