Investors in risk-off mood heading into EU referendum, BofA says

Heading into the 23 June EU referendum, the trends in weekly asset flows continued to reveal a ‘risk-off’ attitude among investors, according to two leading strategists.

European Union equity funds saw their 18th consecutive week of net redemptions – the longest such streak since February 2008 – while UK-focused ones had seen outflows in 12 of the last 14 weeks, Bank of America-Merrill Lynch strategists Michael Hartnett and Brian Leung said in a research note sent to clients and dated 9 June.

Equities registered $2.6bn in outflows versus $7.9bn of inflows into bonds and $0.7bn which headed towards the relative safety of precious metals, they said.

European equities saw $2.2bn in outflows and US-focused ones another $2.0bn, alongside $0.9bn which moved into the EM space.

However, within bonds a ‘risk-on’ attitude could be observed, according to the two strategists, with high-yield bond funds seeing their largest inflows in 11 weeks, to the tune of $2.6bn, while inflows into EM debt funds increased in 14 of the past 16 weeks.