Money-market funds experienced their first outflow in eight weeks, totaling $31 billion, in the week ending December 13, according to Bank of America’s strategists.
On the other hand, equities saw their largest inflows over the same period, attracting $25.3 billion, according to data from EPFR Global reported by BofA. Bonds received inflows of $2.1 billion, while gold saw a modest inflow of $45 million.
Strategists highlighted that cash remains the biggest flow winner in 2023, witnessing $1.2 trillion in inflows to money-market funds. This represents a substantial 25% increase in assets under management (AUM), reaching $5.9 trillion.
Despite the significant inflow into money-market funds, there is an emerging expectation that a considerable drop in cash assets could fuel further increases in risk assets in 2024. However, BofA's strategists caution that historical trends do not necessarily support this assumption.
In terms of equity flows, the report notes that equities experienced their largest eight-week inflow since March 2022, with $74.0 billion entering the asset class. However, Treasuries witnessed their second week of outflows at $3 billion, and emerging market (EM) debt saw its 20th consecutive week of outflows at $2 billion.
The regional breakdown of equities revealed that U.S. equities had their ninth consecutive week of inflows at $25.9 billion, the longest streak since December 2021.
EM equities experienced their second week of inflows at $4 billion, Japan saw inflows resume at $200 million, and Europe sustained its 40th consecutive week of outflows at $1.5 billion.