LONDON (Reuters) - Technology stocks attracted $1 billion in the week to Wednesday, their second largest inflow on record, Bank of America Merrill Lynch (BAML) data showed on Friday, after Apple launched a new iPhone and chipmakers rallied.
The technology sector .SPLRCT has been the best performing on the S&P 500 this year, up more than 25 percent, far outpacing the broader index's .SPX 11.7 percent growth.
Tech stocks surged last Friday after two days of declines, helped by a 1 percent rise in Apple Inc (AAPL.O), its first gains since the launch of its iPhone X.
Nvidia (NVDA.O) led a rise in chipmakers, jumping over 6 percent to a record high as analysts noted the semiconductor firm’s forays into artificial intelligence, cloud computing and self-driving cars.
BAML said the flows into the tech sector were second only to those in late January 2017. Overall, equities attracted $2.7 billion, their fifth straight week of inflows.
The bank’s analysts noted a rotation into more cyclical sectors, with financials attracting $1.1 billion, their largest inflows in seven weeks, and materials $300 million, a 26-week peak.
Emerging markets continued to attract the lion’s share of equity flows, pulling in $2 billion, compared with $1.8 billion for European stocks.
Emerging market stocks lead the bank’s league table of cross-asset winners, returning almost 32 percent year-to-date, while European equities are second with 23.2 percent.
Investors withdrew $300 million from U.S. stocks, and $1.4 billion from Japanese equities - their first outflows in 10 weeks.
Bonds attracted $5.6 billion in total, with investors putting $4.3 billion into investment grade bonds and $1.3 billion into emerging debt. Government bond and Treasury funds suffered their first outflows in six weeks, with redemptions of $500 million.
Reporting by Claire Milhench; editing by John Stonestreet