Investors have spent the second half of this year piling into cash.
In its latest update on investor flows, analysts at Bank of America Merrill Lynch noted that during the second half of 2015, money-market funds have seen $212 billion in inflows, with $48 billion coming in during just the last 4 months.
Over this same period, $31 billion has moved into stocks and $27 billion has come out of bonds.
Money-market funds are basically an alternative to actual cash and are often collections of short-term Treasuries or other highly liquid assets.
And so what this data shows is that investors have been piling into assets that won’t earn much return but will simply preserve an investor’s capital.
On Friday, markets were selling off with particular stress coming from corporate debt — particularly high-yield bonds — as markets get jittery ahead of an expected interest rate increase from the Federal Reserve next week.
But investors have clearly been getting ready for this regime change for some time.
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