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Investors Are Buying American - The Wall Street Journal

Investors around the globe are pouring money into U.S. financial assets, a sign of confidence that the world’s largest economy remains poised to pull through the Covid-19 pandemic better than many others.

Investors world-wide have funneled more than $900 billion into U.S.-domiciled mutual and exchange-traded funds, on a net basis, during the first half of the year, according to data compiled by Refinitiv Lipper. That is a record in data going back to 1992 and is more than investors have put into funds elsewhere around the world combined during the first two quarters of 2021.

The inflows underpin a rally that has carried U.S. stocks to records, ahead of major indexes in Europe or Asia. The SP 500 has climbed over 17% in 2021 to fresh all-time highs, while Germany’s DAX has risen 14%, the Shanghai Composite has added 2.2% and Japan’s Nikkei Stock Average remains little changed.

Investors shifted some buying away from U.S. funds at the end of the first half. Flows to U.S. funds were about $51 billion in June, down from $168 billion in May and the first month inflows fell below $100 billion since January. Meanwhile, flows to foreign funds increased to over $93 billion last month, from $84 billion in May.

Still, investors said that while Covid-19 variants, inflation or central-bank policy shifts could slow the U.S. recovery, they don’t seem likely to derail it, even as other countries struggle with vaccine rollouts or fresh waves of infections.