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Investors tip-toe back to U.S. stock funds

(Adds details on mutual funds and ETFs, analyst quote, table, byline) By Trevor Hunnicutt NEW YORK, March 30 (Reuters) - Investors grew more confident during the latest week, reversing last week's withdrawals from U.S.-based stock funds, data from Lipper showed on Thursday.

Stock funds in the United States attracted $1.8 billion over the week ended March 29, including $402 million in domestic funds and $1.4 billion invested abroad, the research service's data showed.

Last week, reeling from a breakdown of the effort by U.S. President Donald Trump and his Republican party to dismantle Obamacare, investors pulled $4.8 billion from domestic equity funds.

Markets have rebounded in recent days, with the Nasdaq Composite index gaining for five straight days against a backdrop of strong economic data. Healthcare sector funds were a winner during the latest week, pulling in $96 million and breaking a two-week streak of outflows.

"People were betting the economy's going to do OK and this was just a bump in the road," said Tom Roseen, head of research services at Thomson Reuters Lipper. "I'm not sure that all the investors believe that it was a total defeat and that his agenda is going to fall." But bank sector funds posted $611 million in outflows, their third week in a row of withdrawals, and the continued unwinding of a trade that has been popular since Trump's election amid promises of regulatory cuts.

Energy sector funds posted $267 million in outflows, the largest withdrawals since January. Oil prices have been pummeled this month but staged a bit of a rebound this week.

The stream of cash flowing into international stock funds has lasted the better part of the year as investors shift some exposure from pricey U.S. stocks. Investors are finding relative bargains in Europe and emerging markets as global growth seems to take hold.

U.S.-based emerging markets stock funds gathered $1.1 billion in their 13th consecutive week of inflows.

European stock funds reeled in $934 million and the most cash since June 2015 despite Britain formally announcing its intention to leave the European Union and a two-round French vote starting April 23 that has also jolted markets.

Bond funds remained popular, attracted $5.6 billion during the week. Investment-grade corporate bond funds pulled in $4 billion, their 15 straight week of inflows. But concerns about lofty valuations in riskier debt persist.

High-yield junk bond funds posted $248 million in withdrawals, the fourth week of outflows in the past five, according to Lipper.

The following is a broad breakdown of the flows for the week, including mutual funds and exchange-traded funds: Sector Flow Chg % Assets Assets Count ($blns) ($blns) All Equity Funds 1.785 0.03 5,792.521 11,696 Domestic Equities 0.402 0.01 4,106.706 8,358 Non-Domestic Equities 1.383 0.08 1,685.816 3,338 All Taxable Bond Funds 5.577 0.23 2,385.936 5,914 All Money Market Funds -1.623 -0.07 2,322.917 1,032 All Municipal Bond Funds 0.265 0.07 373.738 1,410 (Reporting by Trevor Hunnicutt; Editing by Cynthia Osterman)