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These flows reflect the continued scramble for returns in a
world of evaporating bond yields, together with the partial
lifting of the gloom that had shrouded financial markets since
Britain's vote last month to leave the European Union.
"Investors have shunned equity funds year-to-date, but are now
stampeding into the asset class for fear of missing out," BAML's
global strategy team, led by Michael Hartnett in New York, wrote
in a note titled "Bear Capitulation" on Friday.
They poured $10.8 billion into equity funds in the week ending
July 13, the highest in nine months, almost entirely driven by
the $12.6 billion net inflow into U.S. funds, the most since
September last year.
The S&P 500 hit a record high of 2,168.99 points this week
<.SPX>, up 9 percent from the lows struck in the days after
Britain's June 23 EU referendum. The S&P 500 is up for three
consecutive weeks for the first time since March.
The equity outlier was Europe, where stock funds posted a record
outflow of $5.8 billion, BAML said. That was their 23rd
consecutive weekly outflow.
Globally, investors have pulled a net $123 billion out of equity
funds so far this year, according to BAML.
Emerging market bond funds drew a net $2.7 billion in the week
to July 13, second only to the $3.4 billion net inflow recorded
the week before.
The hunt for yield was clearly reflected in the $2.1 billion
poured into high-yield bond funds on Monday July 11, the highest
daily inflow on record, which led to a hefty $4.4 billion net
inflow for the week.
Investment grade bond funds drew net inflows for the 19th
consecutive week ($1.8 billion) and municipal bond funds
attracted their 43rd straight weekly inflow ($800 million), BAML
said.
Global sovereign bond yields last week slumped to the lowest
ever levels, the most notable move being the U.S. 10-year
Treasury yield's fall to a record low 1.32 percent <US10YT=RR>.
Precious metals funds drew a net $800 million inflow in the
latest week, the 25th inflow from the past 27 weeks, BAML said.
(Reporting by Jamie McGeever; Editing by Keith Weir)
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