Investors are pouring money into the stock market in a big way. Equity mutual funds reported their best quarterly inflow since 2004.
TrimTabs Investment Research reported that U.S. stock mutual funds and exchange-traded funds received $52 billion in new money in the first quarter. In March alone, investors sank nearly $18 billion into funds, the second-highest monthly level over the past two years, TrimTabs said.
Other reports earlier this week also noted that stock funds have been getting more investor money in recent weeks. After the financial market crisis and recession that hit hard in 2008, investors exited stock mutual funds in droves. But with major stock averages continuing to hit new highs in recent months, investors have been regaining their confidence.
According to TrimTabs, U.S. equity funds, global equity funds and bond funds posted inflows in all three months during the first quarter.
“Investors seem convinced the Fed has their back,” said David Santschi, chief executive officer of TrimTabs. “They snapped up equities across the board as the Fed pumped an average of $4 billion per business day” into the financial system as part of its efforts to boost the economy, keep interest rates near zero and keep inflation in check. As a result, investors have seen few alternatives for their dollars other than stocks.
The surge of money into stocks did not come at the expense of bonds. Bond mutual funds received $72.3 billion in the first quarter, the 17th consecutive positive month, TrimTabs said.