Global fund investors to U.S. stocks: Drop dead

April 29 00:17 2015

Global fund investors are dropping U.S. stocks like a rattlesnake on meth. But emerging markets stocks? Sparkly unicorns. TrimTabs Investment research says that investors have yanked a net $15.4 billion from U.S. stock mutual fund and exchange-traded funds this month through April 24. That’s nearly $900 million a day.Better Expected Trade Data Reported By China

At the same time, they have poured $34.8 billion into international stocks this month, or about $1.6 billion a day. Most of that money has gone to red-hot emerging markets. “Equity flows shifted into emerging markets recently as investors chased the monster rally in China,” said Winston Chua, analyst at TrimTabs, in a statement. “Interest in Europe cooled off in recent days, and investors still want nothing to do with the U.S.”

And even though April has been a good month for U.S. stock funds, investors are more interested in the even hotter returns abroad. For contrarians, that’s a good sign. Investors rarely sell investments simply because they’re not as hot as other types of funds. When emerging markets cool off, U.S. stocks will look all the more attractive.

U.S. fund investors are snubbing domestic stocks, as well. The Investment Company Institute, the funds’ trade group, says that investors pulled a net $14.8 billion from U.S. stock funds the four weeks ended April 22. But they invested an estimated $11.3 billion into world stock funds during the same period.