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The
BofA report showed the equity market rally is broadening beyond
the mega caps, as U.S. small cap funds logged their largest
weekly inflow in the week to Wednesday since June 2022, at $5.1
billion.
BofA said in its weekly roundup of fund flows in and out of
world markets citing EPFR data, that flows to cash were running
at an annualized rate of $1.3 trillion in the first weeks of
2024 through to Feb. 21.
Investors can often opt for cash when they are less confident,
but with interest rates at elevated levels and looking less
likely to drop in the very near term, cash-equivalent money
market funds have drawn in flows.
In the latest week, as the S&P 500 hit record highs, investors
put $15.2 billion into bonds, including $10.2 billion into
investment-grade bond funds, which logged a 16th straight week
of inflows, the longest such stretch since October 2021, BofA
said.
The S&P this month topped the 5,000-mark for the first time
ever, thanks to a surge in the so-called "Magnificent Seven"
most valuable stocks that include the likes of Apple, Microsoft
and AI darling Nvidia.
BofA's "Bull & Bear" indicator remained at 6.6 for the latest
week, tilting into "bullish territory", but the bank said this
was not overly stretched.
On a scale up to 10, a reading above 6 is straying into bullish
territory and below 5 is moving into bearish territory.
"Positioning (is) not yet at extreme bullish, but (it) won't
take too long," BofA said in the report.
Last week was also the first time since September that both
energy and raw materials funds registered a weekly inflow,
according to the report.
(Reporting by Amanda Cooper; Editing by Alun John and Susan
Fenton)
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