Fixed income and equity markets have rebounded handsomely off of the economic-shutdown lows in the first quarter. Credit spreads in several fixed income markets have narrowed to normalized levels and some stock indices have recently enjoyed all-time highs. You might expect that investor capital would be flowing into both fixed income and equity strategies as new coronavirus cases wane, economies reopen and sentiment improves. The data, however, shows something to the contrary.  

The chart above illustrates that while flows into bond strategies have rebounded and turned positive for the year, equity investors have been, and continue to be, net sellers. While you may have read about smaller corners of the equity markets experiencing a resurgence of disconcerting trends (e.g., day trading with discount brokerages), the broader equity market flows are not exhibiting the “FOMO” euphoria associated with asset class bubbles.  

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