BofA Merrill Lynch Chief Investment Strategist Michael Hartnett points out that "in [the] past four weeks, equity inflows of $47 billion outstrip [year-to-date] bond inflows of $45 billion."
Despite outflows from government bonds, though, riskier fixed income markets – like high yield debt (junk bonds) and leveraged loans – had their biggest week ever as investors piled into higher-yielding products.
High-yield bond funds expanded assets under management by a record $5.4 billion in the week ended July 24, while leverage loan funds took in a record $2.2 billion.
Below is a complete breakdown of this week's flows, via Hartnett:
Asset Class Flows
Equities: $8.0bn inflows ($4.5bn via LO funds)
Bonds: $4.4bn inflows (largest in 11 weeks)
Commodities: $0.5bn outflows (24 straight weeks)
MMF: $12bn outflows ($130bn outflows YTD)
Fixed Income Flows
Record $5.4bn inflows to HY bond funds (on absolute terms)
Record $2.2bn into leveraged loan funds (57 straight weeks) (on absolute terms)
First inflows to IG funds in 7 weeks (albeit small $0.4bn)
But $1.1bn out of EM debt (9 straight weeks and longest outflow streak since Jan'09)
Chunky outflows from Munis ($1.1bn and 9 straight weeks)
10 straight weeks of outflows from MBS ($0.3bn)
$0.7bn out of govt/tsy
Equity Flows
$0.8bn inflows to EM equity funds = largest in 10 weeks but note chunky $0.3bn outflows from Brazil
Since EM Flow Trading Rule gave a "buy" signal on 6/27, MSCI EM up 512bps
Big $1.6bn inflows to European equity funds
Solid inflows to US ($4.3bn) and Japan ($0.6bn)
By sector, financials ($0.8bn) and healthcare ($0.9bn) are clear winners this week