As much as $20 billion flowed into US equity funds on Wednesday, the day Donald Trump clinched a landslide victory in the presidential election, according to strategists from Bank of America Corp.
The amount was the biggest daily gain in five months, according to strategist Michael Hartnett in a note citing EPFR Global. Small-cap stocks expected to benefit from Trump's protectionist policies posted the biggest inflow of funds since March, at $3.8 billion.
US stocks surged to record highs this week following election results and interest rate cuts by the Federal Reserve. The S&P 500 index is expected to post its biggest weekly gain in a year.
While Trump's proposal to cut corporate tax rates is expected to boost profits, investors also worry that tariffs and immigration policies from his administration will once again fuel inflation. The 10-year bond yield rose sharply after Trump's victory, although much of that increase has since been pared.
A "big win" for Trump could lead to "big policies" including about $8 trillion in tax cuts, $3 trillion in tariffs, and $1 trillion in spending cuts, he said.
Overall, US stock funds added $32.8 billion in the week ended Nov. 7, according to the note. European equity funds saw outflows for a sixth consecutive week of $900 million, due to concerns about the potential impact of tariffs on European stocks.
