By Trevor Hunnicutt
NEW YORK (Reuters) - U.S. fund investors are snapping up foreign stocks, giving international equity managers the most cash in two years, Investment Company Institute data for the latest week showed on Wednesday.
U.S.-based funds that primarily buy stocks outside of the country attracted $8.2 billion in the week ended May 10, while investors pulled $991 million from domestic equity funds, the trade group said.
That is the best week for the foreign-focused funds since April 2015 as European stocks rallied on hopes of growth sparked by very easy monetary policy.
The latest reporting period for flows included the days following the victory of centrist Emmanuel Macron over far-right candidate Marine Le Pen in the French presidential runoff but came before Wednesday's selloff.
In U.S.-dollar terms, the Pan-European Stoxx Europe 600 has returned 16.8 percent this year, compared to the S&P 500's 6.9 percent return in the United States.
"International equities have performed very well in 2017 and yet many U.S. investors have been underexposed. The strong relative returns, coupled with improved sentiment in Europe following the Macron election, has likely sparked greater interest," said Todd Rosenbluth, director of ETF and mutual fund research at CFRA.
"However, if investors become nervous about U.S. equity markets, a focus on taxable bond funds will persist."
Taxable bond funds attracted $5.7 billion in their 23rd straight week attracting cash, ICI said.
Commodity funds, including those that buy safe-haven gold, pulled in $288 million. That is their first week netting cash out of the last three weeks.