Investors poured $31.6 billion into all equity mutual funds and exchange-traded funds in November, favoring equities over bonds for a sixth straight month, data from TrimTabs Investment Research showed on Sunday.
However, flows into equities moderated from October, with flows into exchange traded funds picking up, and investors favored U.S. equity funds over offshore funds.
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"Equity fund flows shifted in two key ways last month," said TrimTabs chief executive David Santschi. "First, inflows were not as strong as they were in October, when all equity mutual funds and ETFs received $53.2 billion, the fourth-highest monthly inflow on record. Second, they were not skewed heavily toward offshore stocks."
TrimTabs said the tilt from offshore stocks may have been due to the outperformance of U.S. mutual funds over the last two months. The average U.S. equity fund gained 5.8 percent over the period, beating the average global equity fund, which gained 2.4 percent in the past two months.
U.S. equity funds and exchange-traded funds attracted $17.5 billion, compared to $14.1 billion that flowed into global equity mutual funds and ETFs.
Investors kept dumping bonds, redeeming $21.8 billion from bond mutual funds and ETFs, the biggest outflow since $36.8 billion in August and the fifth-highest monthly outflow on record. Four of the six biggest monthly outflows from bond funds have happened this year, TrimTabs noted.
The S&P 500 is up 27 percent so far this year. TrimTabs said indicators point to a rise in equity markets to the end of the year.
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"Our liquidity indicators suggest stock prices can keep cruising higher into the New Year, and we advise investors to keep buying any dips," said Santschi.
New offerings by corporations selling shares in the United States fell to an eight-week low of $4.3 billion. TrimTabs said it expects this to increase in the weeks ahead as corporate sellers have one week less than usual to do deals between Thanksgiving and Christmas.
Corporate buybacks fell to their lowest level since January. Announced corporate buying exceeded new offerings by $11.2 billion in October and $16.2 billion in November.