U.S. stock fund investors turning away from America First

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U.S. investors are favoring international stocks over domestic ones, in a shift away from the trend that followed Donald Trump's presidential victory, Investment Company Institute data released on Wednesday show. U.S.-based equity funds invested internationally attracted $4.7 billion during the latest week, the most in a year, while funds that buy shares of companies in the United States gathered just $814 million, according to the trade group's data. Foreign stock funds have absorbed more cash than their domestic counterparts in seven of the last eight weeks, the data show."I think you're seeing some better opportunities internationally," said Jim Jasinski, managing principal at Cape Ann Capital Inc, a wealth management company in Manchester, Massachusetts. "The U.S. markets have been on such an incredible run."During President Trump's inauguration last month, he declared "from this day forward it's going to be only America First," and stocks responded in kind. He has touted a stew of tax cuts, domestic infrastructure spending, regulation cuts and recasting trade deals to boost U.S. jobs and economic growth.

Investors spent the five weeks after his election buying U.S.-based domestic stock funds. World stock funds lagged behind, taking in just $4.2 billion over that period, $50.2 billion less than their domestic counterparts, ICI said. MSCI's benchmark global equity index, which includes the United States, hovered near record territory on Wednesday.

That obscures the fact that U.S. stocks have done far better. The S&P 500 index, a measure of U.S. stocks, has gained 9.5 percent in terms of price since the election, while a comparable MSCI gauge of 45 other countries gained just 5.1 percent. That may mean the foreign stocks are a relative bargain."Whether people like the new administration or not there's a prevailing feeling that it will be a pro-business administration," said Jasinski. "That's tending to prop that market up a bit more and rich valuations might be getting even richer."The relative safety of bonds and gold also drew interest from investors during the week through Feb. 8. Commodity funds, including those invested in gold, attracted $1.1 billion, their most since July 2016.

Bond funds gathered $11.6 billion during the week, the most in more than a year.