Post-election confidence leads to gains for domestic stock funds

This may no longer be the most hated bull market in history.

The Standard & Poor’s 500 stock index has roared to a 22.5% gain the past 12 months, yet investors have yanked an estimated $2.4 billion from domestic mutual fund and ETFs during that period. Since the start of 2015, $145.9 billion has fled.

But the S&P’s 12% gain since the Nov. 8 election has clearly changed investors’ minds. Investors have poured an estimated $70 billion into domestic stock ETFs and funds from then through Feb. 22, according to the Investment Company Institute, the funds’ trade group.

On Monday, March 1, investors poured over the floodgates into the market. SPDR S&P 500 ETF (SPY), the largest domestic stock ETF, saw $8 billion in inflows, according to Bank of America Merrill Lynch. It was the biggest daily inflow since December 2014.

“It really was a continuation of the activity we’ve seen post-election,” sad Mart Bartolini, head of SPDR Americas research at SSGA. “Animal spirits were reignited after President Trump’s address to Congress. The tone from that was pro-growth and the market reacted positively. Financials, industrials and materials sectors all did well.” SPDR S&P 500 ETF has seen its assets grow about $27 billion since the election, a figure that includes market appreciation.

Stock funds and ETFs led the flow show for the week, with net inflows of $9.8 billion. “Inflation assets” — those that would fare best if prices started to soar — saw some of the biggest inflows. Among the inflation-fighters: funds and ETFs that focus on infrastructure, materials and commodities. Possibly boosted by the infrastructure theme, utility funds saw their biggest inflows in 35 weeks.

But investors haven’t given up their love of bonds, either. Bond funds and ETFs saw net inflows of $9 billion in the past week, according to Bank of America Merrill Lynch. Taxable bond funds and ETFs have seen $74.8 billion in new money since the election, ICI said.

And the hard-money crowd hasn’t been quiet, either. Precious metals funds have seen five straight weeks of inflows, welcoming $0.2 billion in the past week.