Investors continue to plunge into U.S. equities, a record high

Since 2015, money has been flowing into the U.S. stock market at the fastest pace, even though ratings are near record highs and higher inflation worries investors as the U.S. Federal Reserve may push for a tightening monetary policy.

Since February, U.S. equity funds have had a net worth of $ 189 billion in flows, a “significant boost,” said Cameron Brandt, research director at EPFR, which collected the data.

Strong growth expectations, lower interest rates, higher consumer spending and rising U.S. vaccine rates have renewed investor confidence in the U.S. economy, which has contributed to the growth in flows in the first half of 2021.

Goldman Sachs expects households and corporations to buy US $ 500 billion worth of shares by the end of the year.

A significant portion of revenue has been focused on cyclical equities such as finance, industry and energy, which appear to be achieving higher economic growth. The U.S. low-value fund raised $ 11 billion in revenue in the first five months of 2021, more than a year in the last decade, according to a monthly study by the Wells Fargo Investment Institute.

Investors are expected to continue to push U.S. funds in the short term, but “we expect the trip to be unstable, as investors will appreciate the Fed’s ability to reduce and raise interest rates,” said Ken Johnson, an analyst at Wells Fargo.

As the U.S. economy continues to reopen and more people demand jobs, Friday’s report on upcoming U.S. jobs is expected to be stronger on Friday, fueling speculation that inflation will rise further.

“We are still in a camp where we want to position ourselves for economic recovery – holding stock and financial stocks and maintaining that procyclical value.” . . but that’s balancing it with health and the basic with consumers, ”said Eddie Perkin, Eaton Vance, the fund’s chief investment officer for equity management.

However, some institutional investors want to reduce their equity exposures in order to reduce risk due to high valuations.

“It’s already changing a bit of growth from growth stocks, because they’re traditionally higher in value, which is lower… I think it could be something more like that, but from our point of view it would be pretty generic,” said Amy Falls, Northwestern University. investment directors for the endowment of. “Simply reduce the risk of equity rather than certain sectors.”