Home / Technology / In the “follow-up rotation”, equity funds from emerging markets become winners: BofA

In the “follow-up rotation”, equity funds from emerging markets become winners: BofA



LONDON: Global investors pulled nearly $ 24 billion from cash funds over the past week to divert money to emerging markets, while slowing the hunt for summer winners, technology and gold, BofA’s weekly fund flow statistics showed on Friday.
BofA analysts, who cited data for the week ending September 9 from cash flow tracking firm EPFR, said they had seen a “lag rotation” with underperformers since the start of the year, such as emerging market stocks hitting $ 3.4 billion. Dollars up, the largest in nine weeks.
The United States, Europe, and Japan, meanwhile, saw moderate outflows, with Wall Street growth stocks dumping the most, with outflows of $ 4.1
billion.
The tech Street and stimulus-led rally on Wall Street stalled last week as investors posted gains after the tech-intensive Nasdaq index rose about 70% from its pandemic lows.
Facebook, Amazon.com, Apple, Tesla, Microsoft, Alphabet and Netflix – collectively known as “FAATMAN” – together lost more than $ 1 trillion in market capitalization between Sept. 2 and 8.
BofA said the stock market fragility this month was partly due to high concentration of technology stocks and increasing retail investor influence, which has been in the spotlight in recent months as markets rebounded amid the coronavirus pandemic. More than 50% of the 7.2% return on the S&P 500 Index in August came from just 10 technology stocks.
However, BofA said it does not see a bear market as the Federal Reserve is “that simple” and Wall Street is “cashless”.
The bank suggests selling if the S&P 500 exceeds 3,600 points. The index rose to 3,588 on September 2 and has lost nearly 7% since then.

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