Deutsche Bank reports that equity investments and buybacks remain strong. Investor positions in equities have stayed stable over the past two months, despite modest gains in the S&P 500.
The overall equity position is slightly above neutral, and inflows and buybacks continue strong. Equity funds attracted $39.7 billion, largely driven by $39.1 billion into China funds. Global funds gained $5 billion, while US funds added $2.7 billion this week.
In contrast, Japan saw record outflows of $8.8 billion, and Europe had outflows of $1 billion, although the rate slowed.
In sector performance, technology funds had their biggest inflows in four months ($7.4 billion), mainly in China Tech. Financials saw their first inflows in five weeks ($1 billion), with Consumer Goods ($0.9 billion) and Real Estate ($0.7 billion) also seeing significant inflows.
Looking ahead to the US election, volatility is expected to rise. Bond-like defensives are currently above average but declining, while cyclicals are slowly improving.
Additionally, buyback activity is likely to increase as earnings season begins, allowing companies to exit blackout periods.
Bond inflows reached a six-week high of $17.5 billion, and money market funds saw $16.7 billion in inflows, with broad-mandate and government bonds leading the way.
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