To find the hottest destination for stock traders, Americans must look overseas.
Investors poured roughly $6 billion into European equities last week, the most in history, according to data compiled by Bank of America Merrill Lynch. More than three-quarters of that was absorbed by exchange-traded funds, which also saw record inflows.
European stocks are particularly appealing at the moment, with political risks subdued following the conclusion of the French presidential election and with corporate earnings growth surging, BAML strategists led by Ioannis Angelakis wrote in a client note on Friday.
- Bank of America Merrill Lynch
The Stoxx 600 index of European stocks is forecast to see earnings expand by 14% this year, a Bloomberg survey shows. That’s even more than the S&P 500, which is experiencing surging profit growth of its own.
But the inflows don’t stop at stocks. Other assets are piggybacking off the move higher in equities, most notably investment-grade bond funds, BAML said. Flows to high-yield funds also remained in positive territory for a third straight week, while money moved into fixed-income funds for an eighth week running.