In a divergence from domestic stock mutual funds, which had outflows last week, foreign stock mutual funds continued their inflow streak of 9 weeks to start 2013.
World equity mutual funds as reported by the Investment Company Institute (ICI) continued to display strength with $3.5 billion of new investor subscription or inflow for the week ending March 6th. This was the 9th consecutive week of investor inflow into mutual funds that invest in foreign stocks which means that every week thus far in 2013 has experienced new investor subscriptions into foreign stock funds. The $3.5 billion inflow for last week was improved from the $2.1 billion that flowed into foreign funds the week prior and was slightly better than the 12 week average of $3.0 billion, a more important intermediate trend line.
Driven by continued evolution of portfolio construction, which advocates for global diversification and also the advent of exchange traded funds and more global fund managers which have enabled investors to gain access to various foreign markets, international stocks have continued to be in strong secular demand by investors. The year-to-date start by global stock funds has been drastically stronger than in years prior. For the first 9 weeks of 2013, investors have bought $37.9 billion of international equity funds, well higher than the $6.3 billion that came into the category during the same period in 2012 and over double the best year on record recently, the $17.5 billion that came into these funds in 2010.
The leading public foreign stock fund manager is Franklin Resources with over $222 billion of its $303 billion in equity assets-under-management in international equity funds. BlackRock (BLK) and Affiliated Managers Group (AMG) are also companies that benefit from these trends with substantial international equity products.