LONDON (Reuters) – Cash funds saw a mammoth $93.2 billion of inflows in the week to Wednesday, Bank of America Global Research strategists said in a report, the largest inflow since March 2023, as high yields on short-dated debt continue to attract investors.
BofA’s weekly ‘Flow Show’ showed equity funds saw $6.2 billion of inflows, led by U.S. equity funds, which saw $5.5 billion of inflows.
Japanese equity funds saw outflows of $500 million, the fifth straight week, as markets bet that the Bank of Japan’s ultra-loose monetary policy could be close to an end.
The yen has strengthened over 1.5% against the dollar in the latest week, while Japan’s main stock index, the Nikkei 225 has fallen almost 3.5%.
Bank of America’s bull and bear indicator, a measure of investor sentiment, rose to 3.8 from 2.7. This was the indicator’s biggest weekly jumps since February 2012, driven by the biggest six-week high yield bond inflow since August 2020 and high emerging market stock inflows.
“Bear sentiment flipping to speculative animal spirits,” BofA strategists said.
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“Sentiment no longer contrarian positive for risk assets.”
(Reporting by Samuel Indyk; Editing by Amanda Cooper)
