U.S. Stock Funds Expected to Regain Popularity

In the years that U.S. stock markets have risen since 1989, investors placed the least amount of cash in U.S. stock funds in 2006, Bloomberg reports.

Through November, domestic stock funds netted $14.7 billion, according to the Investment Company Institute. Of all assets invested in mutual funds, U.S. domestic funds accounted for 78% of the total, the lowest figure since 1984. By comparison, international stock funds took in $135 billion through November, the highest amount since 1984. The record year for flows to U.S. stock funds was 2000, when they took in $259.6 billion.

Given that investors held onto their money last year and that the real estate market is softening, some are now predicting that’s likely to change this year.

“The typical retail investor has largely sat out this bull market,” said Jeff Schappe, chief investment officer at BB&T Asset Management. “I would get nervous if everyone was already in.”

In addition, the weak dollar should boost profits for U.S. companies, said Jason Trennert of Strategas Research Partners.

The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.