By Tyler Durden
As one would expect, in a week that saw the biggest one-day drop in US equities since last September, retail investors bailed on US stocks resulting in what BofA dubbed “risk-off flows” as $1.6 billion was pulled from global equities – with active managers once again getting the short end of the stick, with $4.3 billion in outflows from mutual funds, largest in 7 weeks while another $2.7 billion flowed into ETFs – offset by $9.7 billion inflows to bonds and $0.2 billion to gold.
That said, the bifurcation in equity flows has continued as European equity funds continued to see inflows for an 8th consecutive week (a $1.1 billion inflow) although the pace has slowed from a record level a week ago. The monthly data reveal that the asset class recorded the highest inflow since Dec’15 and the second positive in a row.
The flows reflect big asset allocation preference for EU disclosed previously in the Fund Managers Survey, shown below; rotation into EU from US ($8.9bn outflow) continues
As for the US, it could get worse: BofA’s Mike Hartnett notes that DC disruption presents a new risk as the Washington political malaise causes capital flight from US. YTD foreigners …read more