Despite a dramatic rise in the stock market this year, investors aren’t piling back into U.S. stock funds. Instead they’ve steadily invested in funds that primarily invest in companies outside of the U.S.
It’s an ongoing trend. Both average investors and mutual fund providers have been seeking more diversified portfolios. Stocks from other countries can zig when the U.S. market zags, offering a more stable return. That’s one of the reasons why fund companies have bulked up on foreign stocks in their target-date retirement funds.
Investors started off the year adding a net $19 billion dollars to international stock funds in January, and monthly net inflows continued all year. Strengthening economies in Europe and Japan have attracted investor interest.
But as the Standard & Poor’s 500 index has climbed 25 percent this year, investors have alternated between adding and withdrawing money from domestic stock funds.
U.S. funds took in a net $8.1 billion in October, after rebounding from withdrawals in the prior two months, according to the Investment Company Institute. Net inflows continued into November, but ended in the most recently weekly total reported – a net withdrawal of $1.4 billion in the six-day period ended Nov. 26.Associated Press
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