Igor Kutyaev
Five times more capital has flowed into bond funds year-to-date, according to data from the Investment Company Institute.
Fund investors added $8.3B long-term last week, 17% more than the prior four-week average of $7.1B. They have added way more to their fixed income holdings so far this year ($245B) than equities ($46B), DataTrek reported in their Morning Briefing note.
Equities saw inflows of $7.3B, two times the prior four-week average of $3.6B.
U.S. stock fund inflows were $4.9B, compared to the prior four-week average of $1.4B. Also, fund investors added $2.4B non-U.S. funds. That was almost unchanged from the prior four-week average of $2.2B.
But bond fund inflows were $6.6B, “making last week one of those rare periods when investors added more equity than fixed income exposure,” wrote Nicholas Colas, co-founder of DataTrek.
The prior four-week average fixed income fund inflows were $5.3B.
In addition, commodity funds had inflows of $252M, compared to their prior four-week average of $29M.
Lastly, hybrid stock/bond fund inflows were also unusually high last week at $5.8B, compared to the prior four-week average of $1.8B in outflows.
“Fund investors have been adding equity exposure this year, including last week, which may sound like a warning bell since this investor cohort is sometimes considered ‘dumb money,’” Colas wrote.
But fund investors’ inflows into fixed income holdings year-to-date has been far greater than to equities, he concluded; “a 5:1 ratio in favor of bonds, hardly a signal of excessive investor confidence in stocks.”
Top fixed income ETFs: (NASDAQ:BND), (VCIT), (JNK), (LQD), (TLT), (IEI), (SHY), (SCHO)
Top equities ETFs: (DIA), (SPY), (VOO), (SP500), (QQQM).
Top commodities ETFs: (GLD), (IAU), (OUNZ), (SLV), (SIL), (USO), (UNG).