According to TrimTabs Investment Research, $55.1 billion poured into global equity mutual funds and exchange-traded funds in January and February, marking the largest two-month inflow on record.
However, David Santschi, CEO of TrimTabs, warns that it could mean bad news: Inflows into foreign stock funds have been so heavy this year that bulls should be concerned, Santschi says. Big inflows from fund investors often occur near market tops.
January recorded an all-time, one-month record of $34.4 billion in inflows into global equity mutual funds and exchange-traded funds. Inflows in February decreased to $20.1 billion in February, but that still represented the second highest since October 2007.
Its remarkable that U.S. investors are convinced the grass is greener offshore even though global equities have been underperforming, Santschi says. The average U.S. equity fund is up 6.2% so far this year, more than double the average global equity funds 2.4% gain.
The previous two-month record for inflows into global equity mutual funds and ETFs was $49.1 billion in January and February of 2006. TrimTabs ties that to growing investor enthusiasm in emerging markets, particularly China, at the time.
(CG)