We Just Witnessed Another Historic Week For People Investing In Mutual Funds

Flows into equity funds were stunning in the first three weeks of January, and the final week was no exception.

This past week, total equity inflows were $18.8 billion, the third-largest on record, according to BofA Merrill Lynch.

Flows into bond funds held up as well, but a clear divergence between the two asset classes has emerged in January:

fund flow data

Photo: BofAML Global Research, EPFR Global

Below is a breakdown of this week’s flow data, courtesy of BofA strategist Michael Hartnett:

  • Total flows into equity funds were 0.4 per cent of assets under management at $18.8 billion, with $12.2 billion added to equity ETFs (+0.9 per cent) and $6.6 billion added to long-only equity funds (+0.2 per cent)
  • Total flows into U.S. equities were $11 billion (+0.4 per cent), the largest since 2011, but about half of those flows were into the S&P 500 index as opposed to individual equities
  • Total flows into bond funds were $3.0 billion (+0.1 per cent)
  • Total flows out of money market funds were $12 billion
  • Total flows into emerging market equity funds were $3.7 billion (+0.5 per cent), marking 21 straight weeks of inflows – the longest streak since the fourth quarter of 2010
  • Total flows into European equities were $1.2 billion (+0.2 per cent) and flows into Japanese equities were $0.4 billion (+0.5 per cent)
  • Total flows into emerging market bonds were $1.6 billion (+0.7 per cent), marking 34 straight weeks of inflows
  • Total flows into floating-rate notes were $1.1 billion (+1.9 per cent), the largest since February 2011
  • Total flows into high-yield bonds were $0.6 billion (+0.2 per cent), but flows into investment-grade bonds were only $27 million

Meanwhile, oil funds lost 3.2 per cent of assets under management, government bond funds shrank 0.3 per cent, and gold, silver, and TIPS funds contracted 0.1 per cent. Quite a statement to begin the year.

READ MORE: Anyone Hoping For A ‘Great Rotation’ Into Stocks Must See These Three Charts >

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