Global stock funds saw significant inflows of $25.6 billion in the week through June 12, marking the largest inflow since March, Bank of America said in a Thursday report.
Tech funds led the charge, with a record-breaking weekly inflow of $8.7 billion, pointing to a trend BofA analysts referred to as “AI capitulation.”
U.S. equities experienced their ninth consecutive week of inflows, totaling $20.4 billion. Meanwhile, European equities continued to struggle, facing outflows for the fifth consecutive week, amounting to $1 billion.
Strategists noted that while there is significant interest in AI investments, there are concerns about equity concentration risks. They highlighted that the "all roads lead to Nvidia" trade was “once again bolstered by another equity alternative to US tech (Europe) faltering.”
Meanwhile, emerging market (EM) stocks enjoyed a third week of inflows, drawing $1.6 billion, and Japanese stocks saw a resumption of inflows with $600 million.
Bond funds also performed robustly, registering $6.4 billion in inflows for the 26th consecutive week. Investment-grade bonds attracted $5 billion, marking their 34th week of inflows, while U.S. Treasuries saw $1.2 billion in inflows for the seventh straight week.
However, high-yield bonds faced renewed outflows, losing $200 million, and emerging market debt continued its outflows for the second week with $500 million exiting the asset class. Bank loans also saw outflows resume, with $300 million withdrawn.
Apart from the tech sector, U.S. growth funds also had a record week, bringing in $11.9 billion. Meanwhile, other areas faced substantial outflows. For instance, money market funds (MMF) experienced a marked outflow of $15.8 billion, crypto funds saw $400 million in outflows, and gold funds lost $300 million.
In regional flows, China stood out with a $1.3 billion inflow, marking the largest two-week inflow since February, totaling $3.3 billion. This influx contrasts with the ongoing challenges in Europe and indicates shifting investor sentiment towards more promising markets.