Investing.com -- US equity funds are set to experience a record-breaking year with annualized inflows reaching $448 billion, Bank of America reported.
Money market funds are also witnessing unprecedented demand, projected to receive “massive” inflows of $1.1 trillion in 2024.
In the week ending November 11, equity funds attracted $14.4 billion, while bonds saw inflows of $9.1 billion and cryptocurrencies gained $900 million.
Meanwhile, $600 million exited gold, and money market funds experienced withdrawals of $1.3 billion, BofA said in its weekly ‘Flow Show’ report, citing EPFR global data.
Among other noteworthy flows, BofA highlighted that Treasuries saw outflows totaling $6.4 billion over the past two weeks, marking the highest level since December 2023.
Sector-wise, Financials saw $6 billion in inflows over the past four weeks, the largest since February 2022, while tech stocks had their biggest inflow in six weeks at $5.4 billion.
In the meantime, healthcare stocks experienced outflows of $1.1 billion, the largest since December.
By region, US stocks marked their seventh consecutive week of inflows with $16.4 billion. In contrast, emerging market equities saw their sixth week of outflows, totaling $1.8 billion, while Europe continued its losing streak with $3.6 billion in outflows, its eighth consecutive week.
BofA strategists led by Michael Hartnett believe the S&P 500 is set for “another big double-digit move” in 2025 driven by declining bond yields, which they describe as the “secret sauce” for sustaining equity gains and avoiding sharp reversals.
Strategists suggest it "would almost be a surprise for melt-up not to continue [in] coming weeks/months." This is because the newly elected Trump administration “sees rising stocks/crypto as tool to boost “animal spirits” & few believe Trump will allow bear market.”
Furthermore, “boomy” global macroeconomic data is emerging in the short term, as companies front-load activities to avoid tariffs—evidenced by record-high imports at the Port of Long Beach—and hoard labor ahead of immigration controls, leading to tumbling unemployment claims.
In fixed income, investment-grade bonds extended their inflow streak to 56 weeks, drawing $10.2 billion, while high-yield bonds saw inflows of $1.5 billion for the 15th straight week. However, Treasury funds posted $2.9 billion in outflows, adding to the previous week’s tally.