LONDON, Dec 9 (Reuters) - Global bond funds and gold extended their run of redemptions over the past week amid an “exodus from yield winners”, Bank of America Merrill Lynch (BAML) said on Friday, while energy stocks saw the biggest inflow in a year.
The BAML data, which tracks flows through Wednesday, reported a $0.6 billion equity outflow - a surprise at a time when world stocks hit multi-year highs - while bond funds shed $1.2 billion and gold lost $1.7 billion.
With bonds seeing $34 billion flee in the past six weeks and gold shedding $7 billion over four weeks, these are the most intense redemptions since the 2013 “taper tantrum”, the data showed.
Outflows also gathered pace from emerging markets, a top performing sector this year, with bond funds losing $2.4 billion - their fifth straight week of outflows - while equities shed $1.8 billion.
“Yield plays”, which have received a total $1.1 trillion since 2009, were in retreat, BAML said, noting that this year’s big winners - high-grade bonds, real estate trusts and emerging debt - had seen year-to-date inflows retrace 10 percent, 20 percent and 33 percent respectively in the past six weeks.
“A violent rotation is now morphing into a broader risk rally as cash and bond exposure drops in favour of stocks,” BAML told clients.
On equity markets, the winners were financial stocks, which absorbed new money for the 11th straight week, while bank loans received $1.7 billion for their largest inflow in three years and energy stocks took $1.4 billion, the most in a year.
That comes after last week’s deal between OPEC and non-OPEC oil producers to cut output for the first time since 2008. (Reporting by Sujata Rao; Editing by Hugh Lawson)