In a recent report by Bank of America, the trend among investors during a week of global stock market declines has been a strong preference for cash. Investors poured $80.8 billion into money market funds, making it the most popular choice during this period. Bond funds saw $10 billion in new investments, while equity funds attracted $9.7 billion.
Conversely, the report highlights a significant outflow of capital from other asset classes. Cryptocurrency investments saw a withdrawal of $100 million, and gold faced an even larger outflow of $500 million.
Notably, Japanese equities received $4 billion in inflows, marking the third-largest surge this year, while European stocks experienced a substantial outflow of $2.4 billion, the largest since September. Financial sector stocks faced their biggest withdrawals since November, totaling $1.1 billion. In contrast, technology stocks continued to attract capital, with $3.3 billion in inflows over the past six weeks.
The report also underscores the impact of persistently high real interest rates on the U.S. consumer market and labor force. Investment inflows into U.S. stocks reached $6.4 billion for the sixth consecutive week, while emerging markets saw their tenth week of inflows, amounting to $2.3 billion.
Additionally, large-cap U.S. stocks gained $10.4 billion in new investments, while small-cap and growth stocks witnessed outflows of $3.3 billion and $3.8 billion, respectively. Investment-grade bonds saw a 41st consecutive week of inflows, with $9.4 billion added, while high-yield bonds and bank loans faced significant outflows.
The report concludes with insights on U.S. Treasury securities, which have seen consistent inflows, and highlights the rising interest in inflation-protected securities (TIPS), which garnered $500 million in new investments. Emerging market debt also saw a second consecutive week of inflows, totaling $400 million.