Funds keep flowing into stocks

According to Bank of America's most recent report, cash once again accounted for the majority of inflows last week, while substantial investments kept going into shares, especially in the US.

BofA reported that money market funds had inflows of $27.5 billion for the week ended August 14, citing data from EPFR Global.

This was bolstered by $11.5 billion in inflows into stock funds for the 17th week running. Inflows into bonds were $6.4 billion, but gold and cryptocurrency brought in $400 million and $200 million, respectively.

With $3.9 billion in inflows, the IT sector continued to gain ground, making it seven weeks in a row. Though it was only a small $100 million inflow, European equities funds, which have been struggling recently, had their first inflow since May.

Michael Hartnett, one of the strategists at BofA, stated that investors now see global monetary policy as the most "restrictive" since October 2008 due to the effects of the yen carry trade.

With $5.5 billion in inflows, U.S. equities funds led the way in terms of regional performance, marking the ninth week of positive flows. Additionally, inflows into Japan totalled $1.6 billion for the second week, and for the eleventh week in a row, $1 billion was invested in emerging market equities.

Investment-grade bonds within fixed income have witnessed inflows for 42 weeks running straight, amounting to $3.7 billion in the most recent week. Bank loans saw a third week of withdrawals at $500 million, while inflows into high-yield bonds recovered to $300 million.

After 15 weeks of positive flows in treasuries totalling $3.9 billion, emerging market debt suffered its greatest outflow since May, with $1 billion leaving the asset class.

Style-wise, $4 billion in inflows helped U.S. large-cap stocks, while $1.6 billion was pulled out of U.S. small-cap stocks.

(Sources: investing.com, reuters.com)