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Investing.com -- Global fund flows saw a stark divergence between asset classes and regions in the week to April 30, with international stocks, bonds, and crypto attracting inflows, while U.S. equities, money markets and gold posted significant outflows, according to Bank of America.
Stock funds added $8.3 billion, driven by ETFs, while bond inflows resumed at $3.7 billion. Crypto funds took in $2.3 billion, marking a $4.8 billion total over the past two weeks—the largest two-week inflow of the year.
In contrast, money market funds lost $10.1 billion and gold posted its first weekly outflow since January at $1.5 billion.
U.S. equities saw $8.9 billion in outflows, their third consecutive week of redemptions. BofA noted that for every $100 of inflows to U.S. stocks since the 2020 election, $5 has exited over the past three weeks.
In Europe, equity funds gained $3.4 billion, extending a 12-week streak of inflows. The recent demand has partially reversed the long drawdown, with $14 returning for every $100 that had exited since February 2022.
Japan also attracted strong inflows of $4.4 billion, the highest since April 2024, while emerging market equities saw $1.2 billion in renewed outflows.
Strategists led by Michael Hartnett said the recent price action is now “unwinding significantly” as investors anticipate a Trump policy shift in his second 100 days that includes “lower tariffs, lower rates, lower taxes.”
They emphasized that easing financial conditions, falling oil prices, and robust tech capital expenditures are supporting risk assets. In their view, “so long as payrolls don’t crack,” fears of recession could remain subdued.
New highs in the iShares Global Financials ETF (NYSE:IXG) suggest no recession in the second quarter, Hartnett said. However, he warned that “if bond yields jump on a negative payroll print, risk asset bears will likely pounce.”
On the fixed-income side, high-yield bonds posted the largest inflow since July 2024 at $3.9 billion, and investment-grade bonds saw $1.2 billion in inflows.
Emerging market debt gained $800 million, while Treasuries experienced a $4.5 billion outflow—their largest since December. TIPS and government bonds also saw modest outflows.