U.S. domestic stock funds net cash for 1st time in 4 weeks -ICI

NEW YORK, March 7 (Reuters) - U.S. fund investors are warming to the stock market again. Domestic equity funds took in cash for the first time in four weeks, according to the Investment Company Institute (ICI), as caution toward the markets has once again given way to risk taking. Some $6.4 billion surged into the domestic-stock investment products in the week ended Feb. 28, according to the trade group for mutual funds and exchange-traded funds (ETFs). Overall, equity funds took in $11.7 billion, helped by a 65th straight week of net inflows for funds focused abroad. U.S. fund investors wary of rising interest rates and inflation had avoided stocks in their home market during previous weeks. Those concerns have since ebbed and been replaced by the bogeyman of the United States imposing hefty steel and aluminum tariffs and touching off a global trade war. That and the withdrawal of monetary policy stimulus are reasons to be cautious around U.S. stocks, which, according to Astoria Portfolio Advisors LLC founder John Davi, remain expensive relative to alternatives. "Why do you want to own U.S. equities when emerging markets are so much cheaper, Japan is so much cheaper," said Davi. "Bonds are incredibly expensive and crowded. Commodities are the cheapest asset class out there." Debt funds grabbed $5.2 billion, the most in three weeks, while commodity funds such as those invested in gold pulled in $278 million, according to ICI. The following table shows estimated ICI flows for mutual funds and ETFs (all figures in million of dollars):

2/28 2/21 2/14 2/7 1/31/2018 Equity 11,703 2,505 1,523 -33,974 12,483 Domestic 6,397 -4,899 -7,556 -37,002 4,552 World 5,306 7,405 9,079 3,028 7,931 Hybrid -422 -965 -1,456 -1,393 -183 Bond 5,190 4,451 -12,114 7,303 8,854 Taxable 5,077 3,970 -11,474 7,891 7,009 Municipal 112 481 -640 -588 1,844 Commodity 278 477 182 939 386 Total 16,748 6,469 -11,864 -27,125 21,540

(Reporting by Trevor Hunnicutt)