LONDON Feb 24 The rise in world stocks this
week to fresh all-time highs drew an eighth straight weekly
inflow into equity funds, Bank of America Merrill Lynch said on
Friday, while bond funds also chalked up their ninth straight
The $8.5 billion equity fund inflow in the week to February
22 pushed BAML's "Bull & Bear" indicator deeper into bullish
territory and closer to levels that generate a contrarian 'sell'
For that to happen, however, investors need to reduce their
cash holdings a little further and buy more emerging market and
high-yielding assets, BAML said.
MSCI's benchmark world equity index hit a
record high of 447.67 points this week, and is up 5.6 percent so
far this year. A gain of that magnitude would be its best
quarterly performance in over three years.
The Dow Jones Industrials Average has chalked up 10
consecutive record closing highs for the first time since 1987.
This has led some analysts to warn that a sharp correction, if
not quite on a scale of the 1987 crash, looms large.
U.S. equity funds drew a net $3 billion inflow and European
funds drew inflows for the fifth week in a row, the $1.1 billion
inflow being the biggest in over a year, BAML said.
So far this year investors have poured $60.8 billion into
equity funds, according to BAML and flows tracker EPFR Global.
Some $54.3 billion of that has gone into developed market equity
Bond funds pulled in $7.6 billion in the latest week, the
ninth consecutive inflow, BAML said. Half of that went to
investment grade corporate bond funds, $1.3 billion to HY funds
and $1.2 billion to EM debt funds.
The notable exception was Treasury bond funds, which posted
a fourth straight outflow, this time of $900 million.
(Reporting by Jamie McGeever; Editing by Toby Chopra)