Investor confidence in European equities remains strong, with significant inflows recorded for the week ending Wednesday, according to data from Bank of America (BofA). The European market has outperformed U.S. equities year-to-date, drawing substantial investment interest.
BofA reported that European equities received $4.1 billion in inflows, the highest level since February 2022, when Russia’s invasion of Ukraine triggered market volatility. Over the last four weeks, inflows have surged to $12 billion, marking the highest level of investment since August 2015.
Global Investment Trends Favor International Markets
BofA strategist Michael Hartnett highlighted the trend with a succinct comment: “Year of International. Long China & EU.”
The broader equity market also saw strong investment activity, with global equity funds attracting $22.9 billion in inflows. U.S. equities secured $8.5 billion, while emerging markets drew $2.4 billion.
Tech Stocks See Renewed Interest After Period of Decline
Technology-focused funds, which had been struggling in recent weeks, witnessed an inflow of $2.6 billion—their first positive movement in five weeks. Tech stocks have underperformed this year, with the Nasdaq closing Thursday more than 10% below its December high, signaling a correction.
BofA’s Hartnett also noted the shifting performance of major U.S. tech stocks, formerly known as the “Magnificent 7″—Apple, Microsoft, Amazon, Alphabet, Meta, Nvidia, and Tesla—now humorously referred to as the “Lagnificent 7” due to their recent struggles.
Bond Market Sees Mixed Flows
In the bond market, inflows totaled $12 billion, reflecting continued investor interest. However, U.S. Treasuries experienced a $1.2 billion outflow, marking the largest withdrawal in 11 weeks.
As investors navigate shifting market dynamics, European equities continue to draw strong interest, reinforcing their position as a favored asset class in 2024.