Money market funds attracted their largest inflows in four weeks at $46.7 billion, while investors flocked to purchase the election dips in India and Mexico, Bank of America (NYSE:BAC) said in a note.
The Wall Street giant said bond funds received $17.8 billion and equity funds attracted $10.7 billion last week. Meanwhile, crypto and gold saw inflows of $1.5 billion and $900 million, respectively.
Since the start of the year, money market funds are tracking $620 billion on an annualized basis, and global stocks are annualizing $430 billion, the second highest on record.
BofA strategists included 'heard on the Street' quotes that reflect the current market sentiment.
"70% of portfolio I'm clipping 5% cash, the rest I’m just all-in on YOLO AI."
“You know it's a bubble when everyone starts telling you it’s not a bubble."
Meanwhile, IG bonds are annualizing a record $400 billion, and tech $43 billion, marking the fourth largest on record and sector flow winner in all of the past four years.
For the last week only, the most notable weekly flows include gold with its largest inflow in 11 weeks, treasuries with the largest inflow since November at $6 billion, tech with the largest inflow in nine weeks at $900 million, and utilities with the largest inflow since January 2022 at $1 billion.
Investors bought the election dip in India, leading to the largest inflow on record at $1.2 billion, and in Mexico, marking the largest inflow since November 2016 at $300 million.
The bank's strategists write that oil is “today’s best upside hedge for pre-US election geopolitical risk,” citing a lack of focus on de-escalation by global players and noting that crude has zero risk premium currently, making it a typical asset winner in unanticipated conflicts.
On a regional basis, the US had its seventh week of inflows at $4.6 billion, while Europe faced its third week of outflows at $1 billion. Stocks in the emerging markets (EM) resumed inflows at $3.8 billion, and Japan experienced its fourth week of outflows at $800 million.
In fixed income, investment-grade (IG) bond funds had their 32nd week of inflows at $5.8 billion, high-yield (HY) bond funds saw their fifth week of inflows at $3.1 billion, treasuries continued with their fifth week of inflows at $6 billion, EM debt resumed inflows at $1.1 billion, and bank loans marked their seventh week of inflows at $800 million.