In the week through Sept. 2, bond funds saw $22b inflows, largest in 6 weeks; gold had $1.2b inflows, equity funds had $1.5b outflows and cash funds lost $43.8b, BofA says in a note, citing EPFR Global data.
- Among bonds, highlights include: IG bond fund inflows of $16.6b, third-largest ever; EM debt inflows seventh-largest ever at $3.2b, HY bond inflows of $1.1b
- Among equity regions, highlights include: U.S. saw third week of outflows with $3.9b, Japan had third week of outflows with $0.5b, Europe had small inflows of $0.3b, EM had $1.3b of outflows
- Strategists led by Michael Hartnett say September volatility and reversal in summer outperformance of cyclicals and defensives reflects impatience with delayed U.S. phase 4 stimulus at a time of peak V-shaped recovery
- Strategists also say that France added to global stimulus, which has been a “game-changer” for rates and inflation asset allocation; forecasts lower and more volatile returns in 2021 and beyond, and big outperformance of inflation assets; vaccine belief is missing catalyst for start of yield rise and end of tech dominance