American Funds Find Home In European Stocks

December 2, 2000 ( - Americans - including pension funds and institutional investors - invested more money in European stocks last quarter than any other in the past three years, according to a Lehman Brothers report.

In the third quarter, a net $4 billion flowed across the pond – the most since the $8.5 billion in the third quarter of 1997, according to Bloomberg.  That was a significant turnabout from the second quarter, when US investors pulled a net $12 billion from European stocks. 

Investors also pulled back $12.4 billion from Japanese stocks in the quarter ended June 30.  Last quarter US investors sold a net $5.7 billion of Japanese stocks.

Closer to Home

The attraction is apparently not lost on continental Europeans, who have also been stepping up their equity investments.  As of September 30, an estimated 38% of total financial assets, including pension funds, were in European stocks, up nicely from 20% in 1995.  American investors also have an estimated 38% of their financial assets in stocks, but in the U.K., it’s 57%.

Foreign investors own about 35% of all U.K. equities, according to the report.