WASHINGTON: The stock market’s raw numbers are screaming “frenzy,” but investors appear too smart for that. In the first quarter, major market indexes climbed to records—including the first close over 20000 and then 21000 for the Dow Jones Industrial Average—which resulted in the average diversified U.S.-stock fund registering a healthy total return of 4.8%. However, investors are showing caution, turning again to tried-and-true bond funds, judging by the latest fund-flow statistics.
An estimated net of nearly $112 billion flowed to mutual funds and exchange-traded funds that invest in bonds, based on Investment Company Institute data. In contrast, an estimated $34.5 billion went to U.S.-stock funds in the quarter. The measured reaction shows investors are “trying to look at the world in a more balanced way,” says Charlie Reinhard, chief portfolio strategist at MainStay Investments in New York. “They’re trying to be cautious and careful.”
