Japanese stocks saw the second-largest inflows on record this week as investors built up their exposure to one of the markets hardest hit by the quarter’s global sell-off in equities.
Some $5.8 billion went into the country’s shares in the week to March 28, Bank of America Merrill Lynch said in a report, citing EPFR Global fund flow data. The U.S. saw continued selling, with $15.6 billion pulled from American stocks. Credit funds were also in the cross-hairs, with $2.2 billion taken from investment-grade bond funds, the biggest outflows in more than a year, and $2 billion withdrawn from high yield debt.
U.S. equities continued to see outflows in week to March 28
Source: BofAML, EPFR Global
Investors are acting with a ‘buy-the-dip’ mentality when it comes to Japan, with some highlighting the remarkable discount on offer in its stock market. About $38.5 billion has been poured into Japanese equities so far this year, while the country’s Topix Index has fallen about 6 percent.
By contrast, some $29.4 billion has been withdrawn from U.S. shares over the same period, with the S&P 500 down about 1 percent.
Elsewhere, government bond funds enjoyed a 10th straight week of fresh money, receiving $2.3 billion, the bank said. That’s the longest streak in more than two years, according to the report, and might reflect the recent stabilization in yields after they shot up at the start of the year.