If it appears that there has been a period of perplexing quiet in the financial comedy TV's hammering on the topic of the great rotation, it is because that is indeed the case. The reason? As per ICI [4], following the start of year inflow surge into domestic equity mutual funds, we have experienced a steady trickle lower in inflows, and then, as noted last week [5], have had not one but two consecutive outflows, confirming that the pattern from 2011 is fully set [6]. Finally, for those curious where the surge in early 2013 inflows came from, we suggest rereading our post from December on "A Record $220 Billion "Deposit" Injection To Kick Start To The 2013 Market [7]." In summary: there has been zero, zilch, none "great rotation" out of bonds into stocks, especially since bond funds have seen far greater inflows in 2013 compared to stocks, and the only money "rotating" has been the parked deposits in year end 2012 ahead of the Fiscal Cliff, being reallocated back into equities (of which there is now no more), and some modest money market fund moves, which also have now tapered out.
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