LONDON: Investors piling into tech and financial stocks helped equity funds attract US$46.2 billion in their third-largest inflow on record in the week to Wednesday while inflation linked bonds also shone, BofA's weekly fund flow data showed on Friday.
The data, collected by EPFR before a rise in U.S. real-yields triggered a global stock market correction on Thursday, also showed bond funds attracted US$7.1 billion in a 16th straight week of inflows and Treasury Inflation-Protected Securities (TIPS) added US$1.3 billion.
Investment grade debt attracted US$5.4 billion at the expense of high-yield, which lost US$1.7 billion in the largest outflows in three months, BofA said. In equities, U.S. stocks raked in US$20.4 billion while emerging markets enjoyed record inflows of US$11.6 bln into debt and equity.
"(The) bond sell-off has been wonderful for high yield, small cap, banks, energy, EM…when these reverse as bond yield rise = rate rise flips from good to bad," BofA's chief investment strategist Michael Hartnett wrote in a note to clients.
Meanwhile investors pulled US$5.5 billion out of cash and withdrew US$500 million from gold funds.
(Reporting by Karin Strohecker; editing by Dhara Ranasinghe and Louise Heavens)