Investors Pull Out of U.S. Stocks, Shift Focus to Japan and Europe: BofA Report

LONDON: BofA Global Research reported on Friday that in the week ending Wednesday, investors sold American stocks while purchasing shares from Japan and Europe. BofA reported in its weekly summary of market flows, utilising EPFR data, that U.S. equities experienced an $8.9 billion outflow during the week, although this comes after substantial inflows. BofA reported that for each $100 entering U.S. stocks since the 2024 election, there has been a $5 outflow over the last three weeks.

In comparison, Japanese stocks experienced their largest weekly inflow since April of last year, totalling approximately $4.4 billion, whereas European stocks attracted inflows exceeding $3 billion, indicating that investors are still diversifying their exposure away from U.S. assets. However, BofA stated that there was no indication of foreign owners offloading U.S. assets. U.S. stocks experienced an inflow of nearly $4 billion from international investors, and although there was "minimal foreign selling" of U.S. Treasuries, it came after six weeks of inflows.

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The chaos triggered by U.S. President Donald Trump's tariff declaration on April 2 has highlighted concerns over whether foreign investors will persist in divesting U.S. assets. Nonetheless, U.S. Treasuries experienced their largest outflow since late 2023, totalling approximately $4.5 billion, according to the BofA report. Gold experienced its initial weekly outflow since January.