Flows into equity funds totaled $13.4 billion in the latest week, making it the strongest inflow into equities in twelve weeks, according to Bank of America Merrill Lynch.
The week's inflows represented a .2 percent rise in total Assets Under Management (AUM), bringing the total value of AUM to even year-to-date.
The influx, which included "mom and pop" investors, suggests a rise in risk-appetite.
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Flows into high-yield bonds were the strongest in 17 weeks, at $2.4 billion. Further underscoring the "risk-on" condition of the markets was the outflow from money-market funds. In total, $40.45 billion left cash funds last week, as opposed to an inflow of $11.55 billion into money markets the previous week.
Emerging market debt, regarded as riskier assets, has been hit hard since the beginning of the year. Investors continued their exodus from emerging markets, but at a notably slower rate.
Last week's risk-on momentum continued today, as the S&P 500 touched new record highs before the market's close, rising more than 1 percent and surpassing the previous record set on January 15.
The S&P 500 fell 3 percent in January, when turmoil in emerging markets rattled investors. Data on housing, consumer spending and the Federal Reserve's second reading of fourth-quarter GDP will be released this week.
Corporate earnings have also bolstered confidence. For the companies that have reported, earnings for the S&P 500 have grown on average of 8.5 percent for the fourth quarter, according to FactSet Research, which is stronger than analysts predicted. Fully 72 percent of S&P 500 companies have beaten expectations.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
