| LONDON, June 16
LONDON, June 16 The second biggest ever inflow
into U.S. stocks has given global share funds their best week
since last year's U.S. election, data from Bank of America
Merrill Lynch showed, though there was a warning a
"Humpty-Dumpty"-style big fall could be coming.
Figures from the U.S. bank which tracks investment flows
from Wednesday to Wednesday showed $17 billion had gone into
Wall Street equity funds over the last week, second only to a
$35.5 billion one back in December 2014.
It fuelled a $24.6 billion global increase into stocks as a
$26.3 billion surge into exchange traded funds saw no impact
from the week's sell-off in tech stocks and was only trimmed
fractionally by a $1.7 billion outflow from mutual funds.
Investors also continued to pile into "high-yielding" fixed
income such as emerging market bonds and high-yield debt too,
taking inflows over the past four weeks to $35 billion, the
fastest pace since Feb. 15.
In the tug of war between deflation and inflation,
government bonds, seen as a deflation asset, saw the largest
inflows in 20 weeks at $1 billion whereas inflation-linked U.S.
'TIPS' saw minor outflows for a forth week in five.
There was also a warning about the recent rise in stocks.
BAML analysts said an "end of an era" was looming with the
world's big central banks, that have flooded $10.8 trillion into
financial markets since the collapse of Lehman Brothers and
spent $1.5 trillion this year alone, set to become sellers of
assets in the coming years.
It "won't spark (an) immediate bear market... But this
inflection point in monetary policy will become negative in
coming quarters; Icarus trade likely followed by Humpty-Dumpty
(a "big top" or big flash crash) later in year," BAML said.
"Finally volatility is a buy."
(Reporting by Marc Jones; Editing by Toby Davis)