Investors Pile Into Cash and TIPS in Week to Wednesday: BofA

LONDON—Investors ploughed $14.9 billion into cash in the week to Wednesday and snapped up $1.8 billion of inflation protected U.S. Treasuries as markets suffered a major sell off, a round-up by BofA on flow number based on EPFR data showed on Friday.

Fixed income markets attracted the smallest weekly inflow since March at $3.9 billion with investment grade securities attracting just $2.1 billion and both high-yield and emerging market bonds suffering outflow, the BofA report noted.

Equities sucked in $13 billion with Japan stocks enjoying the best inflows since April 2019 at $4.3 billion and U.S. stocks gaining $71 million, while their European peers suffered a 1.3 billion outflow.

“Late-60s/70s “stagflation” winners were real assets, real estate, commodities, volatility, cash, EM, all of which held their own vs inflation; losers were bonds, credit, equities, tech, all of which ultimately struggled,” strategist Michael Hartnett said in the note to clients.

BofA also noted that central banks around the globe had delivered 999 interest rate cuts since the collapse of Lehman Brothers in 2008 sparked the global financial crisis.