The
bank's report, based on EPFR data which tracks fund flows from
Wednesday to Wednesday, showed investors yanked $15 billion from
equities in the week to Jan. 30, the tenth outflow of the past
11 weeks.
Some $15.2 billion was pulled from U.S. stocks and $3.7 billion
from Europe, marking the 46th weekly outflow of the past 47
weeks from the region.
In turn, bonds recorded inflows of $9.4 billion, their biggest
since January last year. Investors pumped $4.7 billion into
investment-grade bonds, the most since February last year, the
data showed.
Japan and emerging market equities continued to see inflows,
with $4.4 billion and $1.3 billion respectively.
Investors have pounced on emerging market equities and bonds in
recent months amid expectations that the U.S. Federal Reserve
will not raise interest rates as quickly as previously expected,
pushing the U.S. dollar.
Cumulative flows in EM debt and equity hit $369 billion last
week, just $2 billion shy of the record last January, the data
shows.
(Graphic: Emerging Market Inflows - https://tmsnrt.rs/2ToAQvy)
Investors are no longer extremely bearish, with the Bull & Bear
indicator at 3.3, its highest since October and up from 2.8
previously, but investor positioning suggests the risk asset
rally can continue, BAML said.
For instance, the private client Treasury Bill allocation is at
a record high, it said.
The data comes after big swings in stock markets in recent
months - the S&P 500 just closed out its best January since 1987
after suffering its worst December in almost 90 years - as
investors fret about the U.S.-China trade dispute, U.S. interest
rate policy and slowing global economic growth.
(Graphic: TBill allocation - https://tmsnrt.rs/2t11Wgx)
(Reporting by Josephine Mason, Editing by Helen Reid)
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