Global equity funds registered a sixth week of positive inflows, with $1.8 billion flowing into these funds in the week through May 29, according to Bank of America.
Bond funds saw record inflows of $5.1 billion, continuing a strong trend, while $6.7 billion was redeemed from cash funds.
US equity funds saw an inflow of $4.3 billion, also marking a sixth consecutive week of additions. In contrast, European equity funds posted a second week of outflows, with $1.5 billion withdrawn.
According to strategists at Bank of America, “equity breadth” is now worst since March 2009 “as AI crowds out Wall Street and Main Street dollars.”
Moving forward, they expect value stocks to outperform growth stocks, and a broadening market participation “as economic growth slows.” A key factor will be the low April Personal Consumption Expenditures (PCE) inflation reading, which may not be enough to support the struggling tech sector.
Style-wise, large-cap stocks saw inflows of $8.7 billion, while growth stocks received $700 million. In contrast, value stocks experienced outflows of $1.1 billion, and small-cap stocks saw $1.2 billion withdrawn.
By sector, utilities led inflows, attracting $200 million. However, tech funds faced significant redemptions, losing $1 billion.
Among fixed-income investments, investment-grade (IG) bond funds saw $3.6 billion in inflows, marking the 31st straight week of positive additions. High-yield (HY) bond funds continued to attract positive flows, recording a fourth week of additions with $20 million.
Emerging market (EM) debt funds, however, resumed their outflow trend, losing $1.1 billion for the week.