Buy Everything: Gold, Stocks, Bonds All Draw Big Inflows

  • Precious metal funds post biggest inflow in 30 weeks
  • Investors continue to shift funds from U.S. to European stocks

Inflows were back with a vengeance the first week after the summer break as investors piled into everything from gold and government bonds to equities and high-yield credit.

Global funds that invest in gold, equities and bonds netted inflows of $11.6 billion for the week ended Sept. 7, Bank of America Merrill Lynch said in a research report, citing EPFR Global data. Precious-metal funds added the most in 30 weeks, while bond portfolios posted a 25th straight week of inflows.

Investors had a multitude of signals to react to in the first week of post-summer business as usual. While rising political risks including North Korean nuclear tests and American hurricanes sent some investors rushing to haven assets, fresh signals from the European Central Bank that it is prolonging monetary stimulus gave a boost to riskier securities.

Central-bank asset purchases which have totaled almost $2 trillion this year alone are the “best explanation” for money flowing into both bonds and stocks, the Bank of America analysts said in their note.

Investors poured $1 billion into the largest exchange-traded fund backed by bullion last week, the most since mid-2016. The yellow metal traded at the highest level in more than a year on Friday amid growing tensions between the U.S. and North Korea.

Investors continued to shift funds from U.S. equities to stock markets in Europe, Japan and emerging markets. A net $6.6 billion has been taken out of U.S. equity funds since the beginning of the year, while European stocks are sitting on an inflow of $31 billion.

JPMorgan’s Nandini Ramakrishnan explains why 40 billion euros ($48.2 billion) may flow back into European stocks.

Source: Bloomberg
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