Weekly Inflows and Outflows in Equity and Bond Funds

Investing.com – Equity funds experienced a record inflow of $68.7 billion according to a Bank of America report citing EPFR Global data.

Key Highlights

• US Stock Funds: Led inflows with $82.2 billion for the week ending December 18, reflecting bullish sentiment.
• Outflows:
  • Money Market Funds: $63.8 billion exited.
  • Bond Funds: $6 billion in outflows.
  • High-yield bonds: Largest outflow since February 2023 at $3.7 billion.
  • Municipal bonds: Steepest outflows in nearly a year at $1.4 billion.
• Crypto: Attracted $3.1 billion this week.

Looking Ahead

BofA points to abnormally large daily inflows for S&P 500 funds, possibly linked to the quarterly rebalance on December 23. They predict record inflows in 2024 for US equities.

UK strategist Michael Hartnett highlights that maintaining the SPDR S&P Bank ETF (NYSE: KBE) at its 2022 high of $55 is crucial to avoid a shift from a “melt-up” to a “bull trap” before Inauguration Day.

Regional Insights

• US Equities: 11th consecutive week of inflows.
• Emerging Markets: Attracted $4.7 billion for the third straight week.
• Japan: Saw $1.1 billion in outflows for the fifth consecutive week.
• Europe: 12 weeks of outflows totaling $2.6 billion.

Fixed-Income Flows

Mixed performance in fixed-income:
– Investment-Grade Bonds: 60th week of inflows at $200 million.
– Treasury Funds: Third week of outflows totaling $1.7 billion.
– Emerging Market Debt: Ninth week of outflows at $1 billion.
– Bank Loans: Strong interest with $1.2 billion in inflows for their 11th week.