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An
exodus from emerging markets also gathered steam, as investors
pulled $6 billion out of EM equity funds - their seventh week in
the red and the highest weekly tally in five weeks.
Emerging debt funds lost $2.5 billion, their biggest weekly loss
since January 2014.
World stocks were heading for their worst week of the year on
Friday and commodities took a fresh kicking after data showed
Chinese manufacturing shrinking at the fastest pace since 2009.
That sent investors scurrying for the safety of bonds and gold,
and the BAML data showed $2.5 billion flowing into funds
dedicated to government bonds and Treasuries. This fund group
has now seen seven straight weeks of inflow, their longest
streak since November 2012.
Money market funds took in $8.2 billion, the longest inflow
streak since November 2014 at three weeks, the data showed.
Precious metals absorbed $18 million for their second week of
inflows, BAML said in its report, which also cited latest flow
figures from data-provider EPFR Global.
European and Japanese equity funds held out with receipts of
$3.7 billion but this was unlikely to endure in event of
contagion from emerging markets, the bank said.
Emerging stocks have fallen 15 percent so far this year in
dollar terms while many currencies are at multi-year lows
against the dollar.
BAML said it was not yet time to venture back into beaten-down
emerging assets. It added however that another $15 billion in
redemptions in the next two weeks would trigger a "contrarian
buy signal" for emerging stocks.
(Reporting by Sujata Rao; editing by John Stonestreet)
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