New York (HedgeCo.net) – There are a number of indicators that measure investor sentiment, but watching fund flows is one that gets less attention than most. However, a report from Bank of America Merrill Lynch and EPFR Global last week was incredibly telling regarding how investors feel right now.

According to the report, investors moved approximately $17 billion into money market funds over the course of the week that ended Wednesday. An article from CNBC highlighted the report and according to that article, this is the first time in 25 years that money market funds have been more popular than stock or bond funds. Bond funds did see a small inflow during the week, but equity funds saw outflows. According to the CNBC article, investors took $7.4 billion out of the SPDR S&P 500 ETF.

Seeing such huge shifts out of stock funds would be viewed as a bullish sign from contrarians, but this is only one indicator. The AAII Investors Sentiment Survey has shown an increase in bullishness over the last few weeks which runs counter to the findings from the fund flows.

Rick Pendergraft
Research Analyst
HedgeCoVest