Investors Pulled Billions Out Of US Stocks This Week

U.S. equity funds were hit the hardest, recording a whopping $7.5 billion in redemptions - and the majority of those outflows were from ETFs.

BofA Merrill Lynch chief investment strategist Michael Hartnett describes it as a "classic risk-off week," pointing to "outflows from equities, cyclicals, HY bonds & EM debt vs flight to govie, IG bonds & money-markets."

Below is a complete breakdown of this week's fund flows, via Hartnett.

Asset Class Flows

Equities: $1.8bn outflows (note $3.0bn ETF outflows vs $1.3bn LO inflows) (Table 1)

Bonds: $1.7bn inflows (largest inflows in 6 weeks)

Precious metals: $0.2 outflows (8 straight weeks)

MMF: third straight week of inflows post debt-ceiling resolution

Equity Flows

Europe: 19 straight weeks of inflows ($2.8bn) (Table 2)

Japan: 9 straight weeks of inflows

US: $7.5bn outflows (majority out of ETF's - SPY, IWM, UWM)

EM: $1.0bn outflows (largest in 5 weeks)

By sector, chunky outflows from cyclicals (Tech & Financials); in fact, largest weekly outflows from Tech funds ($1.2bn) since Sep'08

Fixed Income Flows

Largest inflows to IG bond funds since May'13 ($1.5bn)

72 straight weeks of inflows to floating-rate debt

First outflows from HY bond funds in 9 weeks (Table 3)

First inflows to govt/tsy funds in 9 weeks ($0.9bn)

6 straight weeks of outflows from EM debt funds

30 straight weeks of outflows from TIPS