Equity funds experienced a significant influx of $20.1 billion in the week leading up to January 31, with technology sectors attracting $2.1 billion of this total, as highlighted in a Bank of America report that references EPFR Global data.
The team of strategists at BofA also noted a substantial withdrawal from utility funds, marking the fourth largest on record at $1.1 billion.
In terms of geographical distribution, U.S. stock funds received $9.2 billion, Japanese stock funds saw $1.2 billion in inflows, while European funds faced redemptions for the fifth consecutive week totaling $700 million.
Emerging Market (EM) stock funds continued to draw interest with inflows for the ninth consecutive week, amounting to $6.8 billion.
This bullish trend is attributed to significant investments into EM stocks, a wide participation across equity markets, and positive indicators in the credit markets.
Bank of America's Bull & Bear Indicator has reached a two and a half year peak of 6.1, signaling a strong bullish sentiment among investors, though it hasn't hit the extreme bullishness that would suggest a market sell-off.
“Investors positioning for Fed cuts/AI-mania note optimal strategy is “barbell” of bubble stocks & very distressed assets,” analysts said in a note.