Europe Funds
After several months of steady flows into equity funds, and the S&P 500’sstreak of record high closes, the Bank of America Merrill Lynch (NYSE:BAC) Bull Bear indicator has jumped to seven, three points under its extremely bullish high of 10.
The indicator has now gone on a one-year round trip from the February 2016 lows of zero, which marks extremely bearish territory. Bank of America remains long equities until the indicator reaches eight, a contrarian sell signal.
The Bull Bear indicator, which is updated weekly and published in Bank of America’s Flow Show report compiled by Michael Hartnett, Chief Investment Strategist at the bank, is based on investor positioning and flows both of which show investors are bullish on the outlook for equities.
For The First Time In A Year, Investors Pile Into Europe Funds
Last week $8.5 billion flowed into equity funds, the eighth straight week of inflows. The trend into passive funds continued with $9.2 billion flowing into ETF funds and $0.7 billion flowing away from active long-only mutual funds. Bend funds also attracted a strong interest from investors. $7.6 billion of inflows were recorded, marking the ninth week in a row of inflows. High-yield bond funds attracted $1.3 billion, emerging market debt funds attracted $1.2 billion, and investment-grade bond funds attracted $3.8 billion. There been nine straight weeks of inflows into investment-grade funds. In seven of the past eight weeks emerging market debt funds have attracted inflows and in 12 of the last 13 weeks, high-yield bond funds have attracted investor cash.
The one standout number in last week’s report is the equity flows total into Europe. European equity funds attracted $1.1 billion of inflows last week, which may not seem like much in the grand scheme of things but it is the largest total in 55 weeks. US investors have now been sending money to European equity funds for five weeks straight although most weekly totals have been minuscule.
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Other notable flows figures include:
“$1bn inflows to US value funds vs tiny $0.1bn inflows to US growth funds; 6 straight weeks of inflows to materials ($0.9bn); first inflows to REITs in 6 weeks ($0.1bn); first outflows from energy in 6 weeks ($0.3bn); 5 straight weeks of inflows to tech ($0.6bn)”