Data from TrimTabs Investment Research showed that investors invested about USD 34.1 billion in equity mutual funds and exchange traded funds in four weeks. The data covered the weeks that ended on November 13. The investments represented the largest four-week total since January this year when investors poured a total of USD 38 billion in equities.
TrimTabs Investment Research is an independent institutional research firm founded in 1990. It focuses its research on the supply and demand of shares of stock and money available for investment, according to its website.
In a note, TrimTabs Investment Research Chief Executive Officer David Santschi said the intermediate-term outlook shows encouraging demand for US equities. Santschi said, "The record highs on many major U.S. stock market averages are luring mom and pop back into the market." Reuters reported that the benchmark S&P 500 index has increased 26% year to date.
The data indicated that investors were betting more in US equities mutual funds than in global funds. In the last four weeks, only USD 14.3 billion flowed into global equity mutual funds while USD 19.8 billion was invested in US equity mutual funds. Since the beginning of October, the average US equity fund has risen 5.2%. It has surpassed the average global equity fund which has only increased 2.4%.
The research also revealed that retail investors continued to avoid bonds even as they poured money in the stock market. Since the beginning of June, bond mutual funds have experienced outflows in all but two weeks. TrimTabs said redemptions amounted to USD 13.4 billion in the weeks covered by its survey.
As far as the performance of the broader economy goes, TrimTabs said the data on unemployment claims showed some improvement. However, the growth of income in the US has remained bland. This was the case even if huge fiscal and monetary stimulus had been infused into the economy.
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