Investors’ Rush into Stocks propels stock rally
Investors continue to rush into U.S. stocks, pouring in more than $60 billion into mutual funds and ETFs.
Mutual funds have attracted about 40% of the total inflow during the first quarter, while ETS took the remaining 60%. Mutual funds can gauge individual investor participation, while ETFs are primarily used by institutional investors such as hedge funds and pension funds.
According to research firm TrimTabs, one of the biggest drivers for the strong inflows has been stimulus from the Federal Reserve.
With the Fed pumping an average of $4 billion per business day of newly printed money into the financial system, investors' appetite for U.S. stocks has returned, TrimTab CEO David Santschi said.
Experts noted that the rush into U.S. stocks this year comes after individual investors stayed away from the market for several years so there is a lot money that could make its way back in.