Cash funds continuing to attract inflows, set for record year – BofA

by | Nov 10, 2023 | Business

LONDON (Reuters) – Global investors continued to pour money into cash funds in the week to Wednesday, as higher yields on short-dated debt put cash funds course for record inflows this year, according to Bank of America and data provider EPFR.

BofA’s weekly ‘Flow Show’ report showed cash funds attracted $77.7 billion of inflows in the week to Nov. 8, putting them on track to see around $1.4 trillion of inflows in 2023.

Bond funds attracted inflows of $11.2 billion, BofA said, the largest weekly inflow in four months, after the Federal Reserve held interest rates steady and had signalled the tightening cycle could be over.

Equity funds saw inflows of $8.8 billion although Japanese stocks saw their largest outflow in seven months after the Bank of Japan tweaked its yield curve control policy, sparking selling of Japanese banks.

Meanwhile, BofA said its Bull & Bear indicator of investor sentiment rose to 1.7 from 1.4, driven by strong inflows to high yield bond funds.

The indicator is still giving a contrarian ‘Buy’ signal, BofA said, after last week falling to its lowest level since November 2022.

(Reporting by Samuel Indyk, editing by Alun John; Editing by Toby Chopra)


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