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Investing.com -- Cash, stock and bond funds received the bulk of inflows last week, while gold saw record withdrawals, according to Bank of America.
During the week ended Oct. 29, cash funds attracted $36.5 billion, equities $17.2 billion, and bonds $17 billion, BofA said.
Crypto funds took in $0.6 billion, while gold suffered $7.5 billion of outflows—the first in 12 weeks and the largest weekly loss on record, following roughly $59 billion of inflows over the prior four months.
Michael Hartnett, BofA’s chief investment strategist, said investors remain firmly long risk assets, buoyed by what he described as the “Trump, Fed and Gen Z puts.”
He wrote that this positioning “won’t change unless and until asset allocators see inflation moving toward 4%,” which would effectively end expectations for 81 rate cuts priced in for 2026. U.S. one-year inflation expectations currently stand at 3.4%.
Hartnett noted that well-flagged 2024 risks—such as a disorderly rise in bond yields, renewed trade tensions, and additional Fed hikes—have failed to derail markets in 2025.
Instead, he pointed out that U.S. Treasury volatility, measured by the MOVE Index, has fallen to its lowest level since 2021, with stocks at record highs and credit spreads near their tightest levels.
For investors seeking exposure to an economic reacceleration without reigniting inflation pressures, Hartnett said “low-income recession sectors” such as XHB, IYR and XRT offer “the best 1Q26 trading upside.”
By region, U.S. equities led with $6 billion of inflows, followed by Japan with $5.4 billion—the largest since April 2024—Europe with $0.5 billion, and emerging markets with $0.7 billion. Within sectors, technology funds received $3.5 billion, while materials saw a record $9.1 billion outflow.