LONDON (Reuters) – European equity funds attracted their biggest inflows since Feb. 2018 in the past week as investors became less bearish about the global outlook, Bank of America Merrill Lynch said on Friday.
In their first inflows in 16 weeks, a total of $300 million (£234 million) was sucked into European equity funds in the week to Wednesday, the bank said, citing EPFR data.
Globally, equity funds saw outflows of $3.8 billion in the past week, while bond funds saw $10.8 billion of inflows. Commodity funds added $300 million in their fifth week of inflows.
The bank’s gauge of market sentiment, called the “Bull & Bear Indicator”, jumped to 2.6, from 1.9 the week before, after seven weeks in “extreme bearish” territory. The indicator runs from zero, indicating extremely bearish and “buy”, to 10, signalling extremely bullish and “sell”.
BAML said it was bullish about the outlook, expecting cyclicals, such as high-yield bonds, oil, copper, the South Korean and German stock indexes, industrials and banks to outperform volatility and defensive sectors like investment-grade bonds, the U.S. dollar, utilities and real estate investment trusts.
(Reporting by Tom Arnold; Editing by Ritvik Carvalho)