Curious how the US retail investor is reacting to the surprising inability to BTFATH? Bank of America explains how: by yanking the most cash from equity funds since November 2011.
Outflows from credit & equity funds accelerate
US HY bond funds reported an outflow of -$2.2bn this week, the largest outflow from the asset class since the last week of June, which wipes away nearly 40% of the $6bn of cumulative inflows since the start of July. HY ETFs and open-ended funds contributed equally to the headline number. Non-US HY funds reported an outflow of -$445mn. US IG funds also reported a large outflow this week of - $1.3bn which is the largest since the -$5bn outflow at the end of June. Inflows into US loan funds continued with another +$1.8bn this week. Outflows from EM bond funds accelerated as well this week, jumping to -$1.3bn from -$800mn a week ago. This marks the 13th straight week of outflows from EM bond funds. US equity funds recorded their worst weekly outflow since November 2011, coming in at -$11.5bn. The only other asset class we track, besides loan funds, to receive inflows this week was Money Market funds (+$15.5bn).
Ironically, if retail loved stocks at the All Time Highs and was scrambling to BTFAiTH, they should be even more enamored with stocks 2%, 3%, 5%, 50% and so on percent lower. They never are. Of course, since the bulk of New Normal (and Old Normal) "investing" is merely momentum chasing by everyone, retail and robot alike, none of the above is at all surprising.