United States Seeing Inflows Of Capital

Even as Wall Street is getting its house in order, many investors are still considering the U.S. as one of the safest places for investment (see Asian Investor article). Bond and equity funds that invest in global and emerging markets had outflows of $9.5 billion last week at a time when U.S. equity funds had $10 billion in new inflows. Last week also saw U.S. money market funds gain $11 billion. This is the 11th time in 13 weeks that U.S. equity funds recorded net inflows. Of interest is that for the first time in five weeks, growth funds outperformed value funds for all capitalization levels. At a time when even U.S. money market funds have come under suspicion and had to be back-stopped, such a move by investors may seem curious. Yet, with the exception of gold, investors have been confused as to where they should put their money given that it needs to go somewhere. Recent moves indicate that at least internationally, they may be starting to make their decisions.