Morgan Stanley fund flow figures show that bond fever is now bigger than stock-market fever was during the dot-com bubble — and confirm that investors’ allergy to stocks is still alive and well.
At one point, Morgan Stanley analysts note, equities and bond markets were about the same size. Now, the stock market is down 20 percent.
However, the investment bank’s research also shows this trend is less entrenched in Europe, probably because of concerns about sovereign debt crises — and that dividend-based equity indices have clearly seen inflows.
U.S. equities, which have tended to lead market performance around big turning points, have seen 20 consecutive weeks of outflows, Morgan Stanley research reveals — and as bond inflows increase, their yields collapse.
The bank’s research also shows investors’ interest in emerging markets continues unabated.
Bank Investment Consultant reports that Junk bond funds took in $824 million last week, a drop from the previous week’s $1.19 billion but the third consecutive positive week for high yield.
The four-week trailing averaged moved to $691 million from $491 million, the highest that average has been since August of 2009.
Inflows into leveraged loan funds totaled $319 million for the week, down form the previous week’s $480 million.
It is the 12th consecutive week of inflows. The four-week average is $252 million. Bank loan funds have been positive for 35 of this year’s 38 weeks so far.
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