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"Total Capitulation" - Biggest Weekly Equity Outflow On Record

If anyone was curious why the Fear and Greed index is at 13 (up from 5) despite the biggest 2-day surge in the Dow Jones ever, the answer is very simple: nobody believes the "broken market "any more, as confirmed by the biggest weekly equity outflow on record.

The full details courtesy of Bank of America:

Record Equity Outflows: weekly flows show $29.5bn outflows from equity funds (largest outflows on record – data since 2002)

  • Equities: $29.5bn outflows (largest on record in absolute terms) ($6bn ETF outflows and $24bn mutual fund outflows)
  • Bonds: $11.7bn outflows (largest since Jun’13)
     
  • Money-markets: $22bn inflows (8w inflows of $121bn = largest since Dec’13)
     
  • Precious Metals: $1.1bn inflows (largest since Jan’15)

The YTD verdict: equity inflows just $448MM YTD, compared to $97bn for bonds. Even commodities have a greater inflow compared to stocks, making one wonder who else is buying (we know it's not the smart money).

Geographic Breakdown:

  • EM: $10.5bn outflows (largest outflows since Jan’08!)
  • US: $12.3bn outflows (largest in 16 weeks)
  • Europe: $3.6bn outflows (largest outflows since Oct’14) (first outflows in 15 weeks)
  • Japan: bucks trend with $3.3bn inflows (inflows in 25 out of past 27 weeks)

Investor Capitulation: daily flows show massive $19bn redemptions from equity funds on Tuesday (8/25) = 2nd largest since 2007 (when daily EPFR data became available)

Credit exodus: $4.2bn outflows from EM debt funds; $4.9bn outflows from HY bond funds; $3.8bn outflows from IG bond funds (largest combined outflows since Jun’13 “taper tantrum”)

 

Fixed Income Flows:

  • $4.9bn outflows from HY bond funds (largest outflows in 2015)
  • $4.2bn outflows from EM debt funds (largest since Jun’13 “taper tantrum”)
  • $3.8bn outflows from IG bond funds (largest since Jun’13 “taper tantrum”)
  • $0.8bn outflows from bank loans (4 straight weeks) (largest outflows since Jan’15)
  • $1.7bn inflows to govt/tsy funds (8 straight weeks)

 

Bull & Bear Index: falls to extreme “fear” territory of 0.5 (scale of 0-10)…most bearish since Jan’12 (Chart 2)