Investors cashed in at the highest weekly rate since April 2020 in the week to March 15, according to a BofA Global Research report on Friday, amid the failure of several U.S. banks. and declines in global banking stocks.
Cash funds saw "huge" inflows of $112.7 billion in the latest week, BofA reported based on EPFR data.
The data includes trends in the days following the collapse of Silicon Valley Bank last Friday. Since then, markets have been volatile, but concerns have eased somewhat after a series of lifelines for struggling banks helped restore some investor confidence.
Cash inflows for the first quarter of 2023 are on track to be the highest since the second quarter of 2020, BofA said.
Meanwhile, equity funds saw "small" weekly outflows of $26 million, and investors pulled $2.3 billion out of bonds and put $600 million into gold.
Since declining flow data on Wednesday, Swiss National Bank has moved to offer Credit Suisse a $54 billion loan to boost liquidity and restore investor confidence while First Republic Bank U.S. received a $30 billion lifeline from a cohort of U.S. banks. the big one.
Turmoil in the market has spooked investors, but BofA said equity flows were unchanged week-on-week and there were "no equity surrenders".
Even so, in Friday's report, BofA emphasized that emergency lending by banks could lead to tighter lending standards, small business credit problems and higher unemployment.
There was a “”flight to quality” in fixed income according to BofA, with $9.8 billion pouring into Treasuries, the biggest weekly inflow since May 2022. Emerging market debt recorded the biggest outflow since November, at $3.1 billion.
BofA's bullish and bearish indicator, a measure of market sentiment, fell sharply to 3.5 from 4.2 the previous week, the lowest since January, with BofA citing “weaker credit flows and worsening stock breadth.
