LONDON (Reuters) – Investors threw $45.6 billion into cash funds in the week to March 24, the largest inflow since April 2020 and ratcheted up exposure to U.S. inflation protection, BofA\u2019s flow data showed on Friday.<\/p>\n
Treasury Inflation-Protected Securities (TIPS) funds saw an inflow of $1.8 billion, their third largest inflow ever, BofA said.<\/p>\n
The U.S. central bank has committed to holding rates near zero for years to come, which investors fear could spur higher inflation given a strong economic recovery.<\/p>\n
U.S. Treasury 10-year yields reached a one-year highs of 1.75% on March 18 but have retreated since and currently stand at 1.65%.<\/p>\n
The week also saw the first outflow out of the tech sector since September 2020.<\/p>\n
The rise in borrowing costs and expectations that cyclicals stocks tied to the economic rebound will outperform has dented the premium investors are willing to pay for so-called growth stocks.<\/p>\n
U.S. growth funds saw outflows of $2.3 billion.<\/p>\n
The Nasdaq, home of IT and tech giants Apple, Microsoft and Amazon has underperformed the broader market so far this year, losing 0.8% against a gain of 6.6% for the Dow Jones index.<\/p>\n
BofA also reported the largest flows towards emerging market debt in six weeks with $1.4 billion and a $2.7 billion inflow into Japanese equities, the largest in 21 weeks.<\/p>\n