LONDON (Reuters) – Investors piled into stocks and ditched cash, gold and bonds, especially safe haven ones, in the week to Wednesday, BofA said in its weekly flow tracking note published on Friday.
Equity funds attracted $30.5 billion while bond funds suffered their first outflow in four weeks at $2.9 billion, cash funds lost $43.5 billion and gold at $100 million, BofA said in its note based on EPFR data.
“Nobody is short the equity market,” said Michael Hartnett, chief investment strategist at BofA.
In fixed income, investment grade as well as high yield bond funds suffered their largest outflows in four weeks at $3.1 billion and $2.0 billion respectively, BofA found.
In equities, U.S. stocks attracted $9.0 billion while emerging markets saw inflows for a fourth straight week, raking in $6.7 billion.
“Inflation off-the-charts, oil prices strong, supply bottlenecks remain, and less-acknowledged G7 unemployment rate close to 40-year lows = wage growth,” Hartnett wrote, adding this meant the rates shock would be global in 2022.
Meanwhile there was little solace for the dollar in sight.
“U.S. dollar smacked despite 7% inflation, less than 4% unemployment, behind-the-curve Fed…because global investors’ belief is U.S. fading fast,” analysts at the U.S. bank said.
(Reporting by Karin Strohecker; Editing by Saikat Chatterjee)