Foreign stock fund trends are breaking substantially higher

World equity 03.28.2013Enlarge GraphThe Investment Company Institute (ICI) is reporting that for the week ending March 20th that World Stock funds, or mutual funds that manage non-U.S. or foreign equities, had another solid week of inflow. Year-to-date World Stock trends are now at their best levels in over five years and will benefit leading foreign stock managers, including Franklin Resources (BEN), Blackrock (BLK), and Invesco (IVZ).

For the 5 day period ending March 20th, World Equity funds posted a $3.7 billion inflow from investors, a $700 million increase from the week prior and over $150 million higher than the 12 week average. The subscription this week over the intermediate term 12 week average is an important indication that investor demand for foreign stock funds was slightly higher last week than year-to-date trends, which indicates that demand may be incrementally increasing. The best week this year for the category was the $6.6 billion subscription during the first week of the year versus the worst weekly period which saw $1.4 billion redeemed by investors for the week ending January 2nd (effectively the last week of 2012).

YTD world equity 03.28.2013Enlarge Graph

 

The year-to-date trends for foreign stock funds have been bolting higher with a substantial $44.6 billion in new money being put into this segment of the market. This makes the $7.3 billion subscription in the first 11 weeks last year seem inconsequential and is double the best of 2010 which saw $21.3 billion of foreign stock funds purchased. The years of 2008 and 2009 were challenging periods for foreign funds with $4.1 billion and $17.6 billion in investor withdrawals, respectively, during the same first 11 weeks.

Franklin Resources is the leader in foreign stock investing with its ownership of Templeton Funds, which comprises two-thirds of its stock assets of over $300 billion.  Both Blackrock (BLK) and Invesco (IVZ) also benefit from solid non U.S. stock interest with solid foreign product offerings.